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Buying home insurance at a good price is a priority for many homeowners. Comparative shopping with multiple companies is the best way to find the coverage you need at a reasonable rate. We’ve evaluated the average rates of the major home insurance companies in Alabama to help you find an affordable policy.
Comparison of Cheap Home Insurance Costs in Alabama
Related: The best home insurance companies
Home insurance cost factors
Your ability to get cheap home insurance in Alabama depends on a number of factors, such as:
- The age of the house structure
- The materials used to build your house
- The cost of rebuilding your home at today’s material and labor prices
- Your location’s complaint history
- Your personal claims history
- The fire classification of the location of your house
- The amount of coverage and the limits of your policy
- Your deductible amount
- Your credit
- Your location
Related: 10 ways to get cheap home insurance
What does home insurance cover?
A standard home insurance policy (also known as HO-3) covers your home for issues that are not explicitly excluded in the policy. Common exclusions include normal wear and tear, power outages, nuclear hazards, war, sinkholes, earthquakes, vermin and bird and insect infestations.
Your personal property is covered against specific “risks” under a standard home insurance policy. Theft, vandalism, tornadoes, fires and explosions are just a few of the issues covered by home insurance.
A standard home insurance policy can be broken down into these main types of coverage:
- Accommodation / Structure: This part of the policy pays to repair or rebuild your home if it is damaged by a covered event. It also covers attached structures, such as a patio or garage.
- Other structures: It pays to repair or replace unattached structures, like a shed, fence, or barn.
- Personal property: This coverage pays to repair or replace your personal effects after a covered problem such as theft or fire. Your personal effects may include your clothing, furniture, clothing, appliances, electronics, jewelry, and other items.
- Responsibility: This type of home insurance covers injuries and property damage that you or members of your household accidentally cause to other people. For example, let’s say your sick tree falls on your neighbor’s shed before you can cut it down. In this case, you would be covered for damage caused to the shed. Liability also pays for a settlement or court judgment against you and your legal defense costs if you are sued.
- Medical payments to third parties: This covers small medical claims made by people outside your household, regardless of fault. For example, if a visiting friend stumbles on your patio steps, medical coverage could cover minor medical expenses. The coverage amounts are relatively low, as little as $ 1,000.
- Additional living expenses: If you can’t live in your home due to an issue covered by your policy (such as a tornado), additional living expense coverage covers additional expenses such as a hotel, restaurant meals, and others. necessary services, such as warehousing.
Related: How Much Home Insurance Do You Need?
What is not covered by home insurance?
Typical exclusions found in a standard home insurance policy include events such as flood, sinkhole, earthquake, power outage, wear and tear, pest and insect infestations, war and intentional losses.
It is wise to read your policy carefully to understand what is excluded from your home insurance coverage.
Most common disasters in Alabama
Alabama homeowners have had to deal with a variety of declared disasters over the years. The most common are hurricanes and severe storms, while the least common are floods, forest fires, and tornadoes.
Alabama’s Gulf Coast can be great for beach days, but not so great when hurricanes hit. In 2017, Alabama was hit by Hurricane Irma in September and Hurricane Nate in October. Irma’s record rains and high winds did enough damage to prompt authorities to declare a state of emergency. About 25,000 residents lost electricity.
Hurricane Nate arrived quickly and brought not only high winds and rain, but also a storm surge, in some areas six to eight feet, waterspouts, flash floods and tornadoes.
Since hurricanes are common in Alabama, home insurance policies come with a hurricane deductible. This is a deductible applied when there is a named storm that is a percentage (typically 1% to 10%) of your home’s housing coverage limit. For example, if your house limit is $ 300,000 and you have a 5% deductible, you would be responsible for $ 15,000.
Disasters by month in Alabama
September has historically been the busiest month for reported disasters in Alabama, followed by March and April.
Disasters in Alabama by year
Over the past 20 years, Alabamians have faced an average of 2 declared disasters per year. In 2020, Alabamians faced the Covid pandemic and several severe storms, thunderstorms, floods, wind events and tornadoes.
Alabama Flood Insurance
A standard home insurance policy does not cover damage caused by flooding. And with a flooding problem in Alabama, you should consider flood insurance if your property is in danger.
In October 2021, central and southern Alabama were hit by a slow rainstorm that dropped about 13 inches of rain overnight. Flash floods swept away cars and more than 80 people had to be rescued from their flooded homes outside Birmingham.
Many areas of the United States experience devastating and costly flooding that has not been declared a federal disaster. Here is a look at the number of recent floods in Alabama.
Government financial assistance after a flood may be limited. It’s a good idea to have your own flood insurance instead. Most homeowners who have purchased flood insurance buy it through the National Flood Insurance Program (NFIP), a federal program. Private flood insurance is also an option.
FEMA’s Individuals and Households (IHP) program can provide financial and direct assistance after an emergency or major disaster, if you qualify. This program helps people find housing after a problem directly related to a disaster, which is not covered by insurance or other sources.
Earthquake Insurance in Alabama
Alabama is not known for its earthquakes, and there are on average only about three a year. The earthquakes it experiences are usually minor, time will only tell if they will become a bigger problem for homeowners.
In November 2021, central Alabama experienced two consecutive earthquakes. Both recorded a magnitude of 2.4. The earthquakes were 100 miles away and had reported no damage. However, in recent years there has been more land movement; 2020 saw eight earthquakes and 2019 had 17.
Alabama has two flaws that affect it. The southern Appalachian seismic zone affects the northern part of the state and the Bahamian seismic zone Invoices the southwestern part.
If you want coverage for earthquake damage to your home, you will need to purchase a separate earthquake insurance policy. Your standard home insurance policy does not cover earthquakes.
Earthquake insurance generally covers:
- Personal property
- Other structures
- Additional living expenses
Earthquake insurance usually has a separate deductible from your home insurance, usually between 10% and 25% of the housing policy limit.
Tips for buying home insurance
Whether you’re looking to change insurance companies or just about to close your first home, you want to get an affordable home insurance policy without sacrificing coverage. Here are some guidelines for longtime owners and newbies:
- Estimate your reconstruction costs. Ask your insurance agent or a trusted contractor for prices to rebuild your home with materials and labor costs that are fair to your area. You want your home coverage to be at least equal to this estimate, if not more.
- Consider additional coverage for your belongings. If you own high-value personal property, such as antiques or expensive electronics, sports, or music, you may want to consider planning personal property for those expensive items. This way, they can be covered for their full value.
- Consider the benefits of replacement cost instead of actual cash value. Consider replacement cost coverage for your home and belongings â you will get the amount you need to replace your home and items with new versions. With the actual cash value you will get a depreciated amount.
- Determine the amount of liability coverage you need. You should choose an amount that covers the value of what might be taken away from you in a lawsuit, or at least $ 300,000.
- Look for gaps in coverage. Some home insurance companies offer additional benefits, for example, to help pay for damage caused by water or sewer backups, or offer higher limits for landscaping such as trees and shrubs. ‘they are damaged during a covered event.
- Research financial ratings. Check the financial strength ratings of companies such as AM Best or Standard & Poor’s. Some financial institutions may not offer you a mortgage unless your insurance company has at least an âAâ financial strength rating.
- Compare quotes from several insurance companies. The price of the same home insurance policy can vary considerably from one insurance company to another. If you don’t shop, you won’t know how much you can potentially save.
- Ask for discounts. Make sure you get all the discounts you are entitled to. For example, you may be eligible for a discount for certain home security or home security features, or for purchasing home and auto insurance from the same company.
Average home insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy with home coverage of $ 300,000 and liability coverage of $ 100,000.