The Gulf Coast state of Alabama is prone to tornadoes, windstorms, tropical storms, and even hurricanes. When Hurricane Katrina hit the gulf coast, Alabama sustained tropical-storm force winds and a significant storm surge. For protection against such storms and other unforeseen circumstances, Alabama homeowners should strongly consider purchasing some kind of home insurance.
How Much Does Alabama Home Insurance Cost?
In 2010, the average annual premium for homeowners insurance in Alabama was $1,050, according to the Insurance Information Institute. Instead of selecting the minimum coverage required for your mortgage, take time to research the types and levels of coverage you need in the event your home or personal property is lost or damaged due to unforeseen events, and instead select the minimum coverage required for their mortgage. You may end up paying too much for coverage unless you take the time to compare rates.
The Alabama Department of Insurance (ALDOI) provides a helpful Consumer’s Guide to Homeowner’s Insurance that addresses many common questions homeowners have about protecting their home and property, and liability coverage. According to the guide, factors that influence rates in Alabama include how the house is constructed, the age of the house, access to local fire prevention services, the amount of coverage you are purchasing, the deductible you select, and any discounts the insurance company may offer. In general, frame houses cost more to insure than brick houses, and new homes may qualify for discounts because they are built according to modern codes that make them more fire resistant. Also, something as simple as your home being located far away from a fire hydrant could cause your rates to go up.
What Does It Cover?
Home insurance protects Alabama residents from financial loss due to theft, damage, or loss of their home and property, and also pays for legal expenses and damages. A homeowner’s policy may also cover additional living expenses if you must rent a place to live while your home is being repaired. Liability insurance, which provides protection from claims arising from injuries or damage to other people or property, is included in most homeowner’s insurance policies, with some exclusions. The best way to make sure you are fully shielded from the cost of litigation and damages is to ask your insurance agent about any exclusions and the possibility of purchasing a separate policy you cover you for such events.
Do I Have to Get Home Insurance in Alabama?
Home insurance is not required by law in most states. However, if your home is mortgaged, your lender will likely require you to purchase insurance. Alabama residents can refer to ALDOI’s Consumer’s Guide to Homeowner’s Insurance for details about insurance options in the state.
Optional Coverage to Consider
- Flood. Standard policies in Alabama do not cover flood damage, but your insurance company may offer it under a separate policy. Your lender will generally only require flood insurance if you live in a flood plain, but the risk of flood is not limited to such areas, so homeowners would be wise to consider flood insurance, particularly if they live in areas prone to hurricanes, tropical storms, or heavy rains. Homeowners who live in certain areas of Alabama may qualify for flood insurance through the National Flood Insurance Program. If you’re on the fence about the importance of flood insurance, consider the data from the National Weather Service on floods that have devastated areas of Alabama over the years.
- Fire and Lightning. Fire and lightning coverage is a type of hazard insurance generally included under standard homeowner’s insurance policies, but it’s still smart to double check that you are covered in the event of these specific perils, which can lead to the loss of your entire home and all of your belongings. Fire and lightning coverage protects you from the cost of damage to your home and property caused specifically by fire and lightning. Some insurance companies offer discounts if homeowners take certain precautions, such as having fire alarms, fire extinguishers, and sprinkler systems installed in their home.
- Hazard. Hazard insurance is a general term used to cover physical damage caused by specific hazards such as fire, vandalism, and smoke damage. When you purchase hazard insurance, be sure to read the policy language carefully. Some hazard insurance coverage only covers the cost of damages due to expressly named hazards, while other hazard coverage shields you from damage from all hazards except those excluded by name.
- Windstorm. Windstorm and hail damage is covered in most standard insurance policies in Alabama, but along coastal areas, this coverage may be excluded. Your policy may stipulate that a higher deductible will apply if damage occurs as a result of a hurricane event, as opposed to damage that results from a windstorm. Since windstorm damage is not uncommon in Alabama, particularly in coastal areas near the Gulf of Mexico that are exposed to hurricanes and tropical storms, it is important to talk with your agent about what costs would be your responsibility in the event of a windstorm or larger, named storm.
- Earthquake. While Alabama is not known for frequent earthquakes, homeowners in Alabama are not immune from such occurrences. The U.S. Geological Survey has historical records of earthquakes inside and outside state lines that have caused tremors and damage to property in Alabama. To protect against such a hazard, consider adding optional earthquake coverage to your homeowner’s policy.
- Watercraft Endorsement. Adding a watercraft endorsement to your homeowner’s policy can extend your liability and medical payments coverage to certain watercraft you may own, including small sailboats and outboard motor boats. This will shield you from the potential costs of lawsuits, damages, and medical expenses that may result from someone using your watercraft. Many homeowners don’t think to insure watercrafts, and are unaware of the liability that could result from their use by friends and family.
- Scheduled Personal Property Endorsement. If you have certain valuables that need broader coverage than the rest of your property, you may want to consider a scheduled personal property endorsement, or personal article floater. This endorsement lists possessions like jewelry, rare coins and stamps, antiques, computers, firearms, and other valuables and equipment and covers them beyond what would have been covered in a standard homeowner’s policy. Each valuable is itemized and described in detail in the event that the item is stolen, damaged, or lost to various hazards.
Mobile Home Insurance in Alabama
Mobile home insurance specifically covers your mobile or manufactured home, your belongings inside your mobile home, such as furniture, clothing, and appliances, and even buildings near your mobile home. A mobile home policy also typically includes personal property protection, family liability protection, guest medical protection, home and other structure protection, and additional living expenses.