8-K

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                                 DATE OF REPORT
                                  MARCH 8, 2006
                        (Date of earliest event reported)

                           VESTA INSURANCE GROUP, INC.
             (Exact name of registrant as specified in its charter)

                 Delaware                                    63-1097283
     (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                    Identification No.)

           3760 River Run Drive                                35243
            Birmingham, Alabama                              (Zip Code)
 (Address of principal executive offices)

                                 (205) 970-7000
              (Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities
    Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
    Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

================================================================================



ITEM 7.01 REGULATION FD DISCLOSURE

On March 8, 2006, the Registrant issued the press release attached hereto as
Exhibit 99.1 and incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

    (d)   Attached hereto as Exhibit 99.1 is a copy of Vesta Insurance Group's
          press release.



                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.

Dated as of March 8, 2006.

                                      VESTA INSURANCE GROUP, INC.

                                 By:  /s/ John McCullough
                                      ------------------------------------------
                                 Its: Vice President - Associate General Counsel

EX-99.1

                                                                    Exhibit 99.1

                   VESTA ANNOUNCES A.M. BEST RATING CHANGE

    BIRMINGHAM, Ala., March 8 /PRNewswire-FirstCall/ -- Vesta Insurance Group,
Inc. (Pink Sheets: VTAI.PK) announced today that A.M. Best has downgraded the
company's property casualty subsidiaries' ratings to C++ (Marginal) from B
(Fair). Best's Ratings reflect the A.M. Best Company's opinion based on an
evaluation of the company's balance sheet strength, operating performance and
business profile.

    "We are disappointed with Best's evaluation of the company, which we believe
focuses on our current balance sheet. While we recognize these balance sheet
concerns, we have also seen improving operating results throughout 2005 stemming
from rate increases and underwriting actions taken over the last several years,
and our underlying business is now performing well," said David W. Lacefield,
Vesta's new President and CEO. "We have always paid our claims promptly and
serviced our accounts, our franchise is valuable, and we are actively working
with third parties to structure a transaction that will protect this long-term
value for our shareholders and other constituents."

    Vesta's statutory capital and surplus has declined over recent years due to
higher than anticipated losses from the 2004 and 2005 hurricane seasons,
combined with other declines in statutory surplus attributable to changes in
accounting estimates. While Vesta successfully executed previous capital
enhancement plans, which included the sale of its life insurance and automobile
insurance operations, the hurricane losses largely offset the surplus realized
through those transactions.

    About Vesta Insurance Group, Inc.

    Vesta, headquartered in Birmingham, Ala., is a holding company for a group
of insurance companies that primarily offer property insurance in targeted
states.

    This news release contains statements concerning management's beliefs, plans
or objectives for Vesta's future operations or financial performance, including
ongoing discussions with third parties to structure a transaction that will
protect our long term franchise value. These statements, whether expressed or
implied, are only predictions and should be considered "forward- looking
statements" under applicable securities laws. You should be aware that Vesta's
actual operations and financial performance, may differ materially from those
reflected in these forward-looking statements. The main factors that could
affect these forward-looking statements are that the anticipated transactions do
not come to fruition, which could lead to a significant loss of premium volume
and have a material adverse effect on our results of operations.

SOURCE  Vesta Insurance Group, Inc.
    -0-                             03/08/2006
    /CONTACT:  John W. McCullough, Vice President-Associate General Counsel of
Vesta Insurance Group, Inc., +1-205-970-7056, or Jmccullough@vesta.com/
    /Web site:  http://www.vesta.com /

_