Sweet Home Alabama
Where the water in the Gulf is so blue.
Sweet Home Alabama
Where Tide and Tiger rivalry is so true.

Now little Opp has the Rattlesnake Rodeo...

Ok. Enough of our lame attempts at ripping off Skynyrd. You're here to find out about Alabama house insurance rates and that's what you'll get. We're not going to coach you like the Bear would coach you—this will be easy. You just need the best tool available for finding the lowest rates possible: knowledge. So let's get started.

Alabama House Insurance: Scattered, Smothered and Covered
According to the National Association of Insurance Commissioners'2007 report, Alabamians paid an average premium of $905. And the most popular homeowner's policy? The HO-3 which consists of the following:

  • Coverage from damage to your Dwelling and Other Structures (garage, shed, etc.) from named perils like fire, lightning, etc. Typically only excludes flooding, earthquake, war and nuclear hazard.
  • Coverage from damage to your Personal Property. Coverage is typically 50% of the dwelling amount. And it costs about 70% of the dwelling rate.
  • Personal Liability covers you against civil suits and damages when others are injured on your property. Coverage typically starts at $100,000.
  • Medical Payments pay for medical expenses when others are injured on your property.
  • Additional Living Expenses pay for you to live elsewhere when your home is unlivable. This is usually 20% of your dwelling coverage.

More Things You Should Know About Alabama House Insurance
The amount of coverage for your home should not be based on the market value or the tax assessed value and should not include your land and foundation. It's the amount to rebuild using today's construction costs usually expressed as a cost per square foot.

The difference between "actual cash value" (ACV) and "replacement cost" .
ACV takes depreciation (age, wear, tear) into consideration when calculating for a loss. For example, a tornado takes off your 10-year-old roof and needs to be replaced. If the average life of a roof is 20 years, you'd most likely be reimbursed for half of what a new roof would cost. Replacement cost—usually purchased at a slightly higher premium—replaces, repairs, or rebuilds using the same or similar materials without considering depreciation.

Flood insurance is not included in a standard policy. Rates—averaging about $300 a year—are based on risk and amount of coverage. Check floodsmart.gov to find your property's risk.

What Affects My Alabama House Insurance Rates?
Here's a list of items that may affect your policy rate:

  • Type of construction-brick is less expensive to insure than frame homes
  • Age of House- newer homes are less expensive to insure. Their wiring, plumbing and construction are more up-to-date.
  • Local Fire Protection- Distance to fire hydrants and the quality of local fire departments help determine rates.
  • Amount of coverage-the more coverage the higher the premium.
  • Deductible- the lower the deductible, the higher the premium.

Sample Alabama House Insurance Rates
To give you an idea of rates, let's look at some sample scenarios published by the Alabama Department of Insurance:

Bay Minette (HO-3) Scenario- 25-year-old brick home; $75,000 dwelling coverage; $500 deductible plus coverage for liability, personal property and loss of use.
Rate ranged from $640 to $2,662.

Huntsville (HO-3) Scenario- 25-year-old brick home; $75,000 dwelling coverage; $500 deductible plus coverage for liability, personal property and loss of use.
Rates ranged from $366 to $760.

Mobile (HO-3) Scenario- Five-year-old brick home; $150,000 dwelling coverage; $1000 deductible plus coverage for liability, personal property and loss of use.
Rates ranged from $948 to $2,945.

Birmingham (HO-3) Scenario- Ten-year-old brick home; $200,000 dwelling coverage; $1000 deductible plus coverage for liability, personal property and loss of use.
Rates ranged from $541 to $1,775.

Lowering Your Alabama Home Insurance Rates
That was easy, right? Now let's look at some specific ways you can save up to 50% on your rates—insurance companies discounts. Here's a brief list of potential discounts:

  • House protective devices like dead-bolt locks, smoke detectors, fire extinguishers, automatic sprinklers, burglar/fire alarms, and new plumbing/wiring.
  • New house discounts. The newer the house the lower the risk.
  • Multi-line (house, auto, life)
  • Senior (55+)
  • Non-smoker
  • Paying in advance vs. making monthly or bi-monthly payments.
  • Payroll deducted payments.
  • Military

If you read the above scenarios you could see how varied the market is with rates. So the biggest way to save on your Alabama house insurance rates is to comparison shop with a company like LocalInsurance. LocalInsurance searches the web for agents in your area, presenting a handful of rates and companies to compare. It's quick, easy and could save you hundreds.

Alabama has a Department of Insurance which can help ensure that you have the appropriate coverage for your home and provide you with useful information when selecting a homeowners insurance policy.