In addition to being a state located on the coast, Alabama stretches over 300 miles inland bordering Mississippi, Georgia, Florida and Tennessee. As the 24th most populous US state, Alabama’s nearly 5 million residents regularly experience extreme weather, especially during tornado and hurricane seasons where there is the highest risk. The spectrum of risks from coastal, rural and urban areas makes Alabama a complicated state for insurance companies to determine the pricing and coverage options available for some homeowners.
Being considered a coastal state, many homeowners are deemed high risk and often face the prospect of claims ranging from water, wind, hail and sometimes total losses. Luckily, only 3 major hurricanes have made landfall since the year 2000, Hurricane Katrina in 2005, Hurricane Dennis in 2005 and Hurricane Ivan in 2004. Alabama deals with the aftermath of hurricanes, tropical depressions or other large storms as they move inland and weaken causing a tremendous amount of down pour.
The northern part of Alabama is mostly mountainous having the Appalachian Mountains, among others, running through it. This higher elevation can result in cold temperatures in some areas leading to a variety of water and freezing pipe claims for homeowners. Much of the middle of Alabama is gentle plains with rural areas that put homeowners at risk for fire and wind claims as they are sometimes far from fire departments and have some of the highest risk for tornadoes. While Alabama is mostly a safe state, a few urban areas have been deemed by insurance companies as high risk due to claims activity from theft and other manmade issues.
Every year the state sustains an average of 56 inches of rainfall which makes consumers in some areas prone to floods, nature’s number one natural disaster. These natural disasters are not within the homeowners control; however there are things that can be done to mitigate these occurrences.
The Alabama Insurance Underwriting Association (AIUA) or commonly known as the Alabama FAIR Plan can provide coverage for some high risk homeowners insurance mainly along the coast in Mobile or Baldwin counties. Whether in those counties or in the rest of the state, consumers are urged to get quotes in the private market.
With the insurance industry shifting much of its focus to mitigating risks before a claim happens, consumers are urged to evaluate their home if they are in a flood zone. Sealing walls homes, installing "check valves" for water back up, setting up barriers to block flood water, installing an alarm system or installing a new roof are worth looking into both for the savings on insurance for safety in general. Many insurance companies now have responded with different deductibles, surcharges or credits for consumers, not only based on the age of the roof, but now the type of roof and materials. While everyone hopes for mild weather and a lack of natural disasters, consumers will find themselves more and more looking toward mitigating risk both to protect their futures and their insurance premiums against the perils the state faces