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 2, 2004
                        (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)




Item 9. Regulation FD Disclosure.

On March 2, 2004 the Registrant issued a press release concerning one of its
arbitrations. A copy of this press release is attached as Exhibit 99.1 and
incorporated herein by reference.

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 2, 2004.

VESTA INSURANCE GROUP, INC.

By:  /s/ Donald W. Thornton
     -----------------------------
Its: Senior Vice President --
     General Counsel and Secretary

EX-99.1

                                                                    Exhibit 99.1

                       Vesta Announces Arbitration Ruling

    BIRMINGHAM, Ala., March 2 /PRNewswire-FirstCall/ -- Vesta Insurance Group,
Inc. (NYSE: VTA) announced today that the panel in its arbitration with NRMA
Insurance Ltd. has ruled in favor of NRMA in the 20% whole account quota share
reinsurance dispute.  As a result, Vesta will incur approximately a
$33.5 million charge to 2003 fourth quarter earnings.  Vesta is currently
evaluating other potential financial implications of this ruling, including
its impact on the remaining 20% whole account quota share arbitration
recoverables and the recoverability of its deferred tax asset and goodwill.

    "We vehemently disagree with the panel's final ruling and we are
evaluating all remaining legal options to fight this decision," said Norman W.
Gayle III, President and CEO.
"Excluding the financial implications of this ruling, we expect to report
positive income from continuing operations for the fourth quarter and full-
year," said Gayle.

    Vesta will release fourth quarter earnings March 15, 2004 and hold its
quarterly conference call to discuss fourth quarter 2003 results on March 16,
2004 at 10 AM EST.  The conference call will be simultaneously webcast live
online through Vesta's corporate website, www.vesta.com
and http://www.firstcallevents.com/service/ajwz400350274gf12.html .

    About Vesta Insurance Group, Inc.

    Vesta, headquartered in Birmingham, Ala., is a holding company for a group
of insurance and financial services companies that offer a wide range of
consumer-based products. This news release indicates management's beliefs,
plans or objectives with respect to the earnings for the fourth quarter and
full-year.

    These indications, 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. Please refer to the documents Vesta files from time to
time with the Securities and Exchange Commission, specifically Vesta's most
recent Form 10-K and Exhibit 99.1 attached thereto, which contains and
identifies additional important factors that could cause the actual results to
differ materially from those contained in the projections or forward-looking
statements.

SOURCE  Vesta Insurance Group, Inc.
    -0-                             03/02/2004
    /CONTACT:  Charles R. Lambert, Vice President - Investor Relations of
Vesta Insurance Group, Inc., +1-205-970-7030, or CLambert@vesta.com /
    /Web site:  http://www.vesta.com
                http://www.firstcallevents.com/service/ajwz400350274gf12.html/
    (VTA)

CO:  Vesta Insurance Group, Inc.; NRMA Insurance Ltd.
ST:  Alabama
IN:  INS
SU:  LAW CCA MAV ERP