SB264 Alabama 2010 Session

Summary

Primary Sponsor

Roger Bedford, Jr.

Democrat

Session

Regular Session 2010

Title

Homeowners insurance, homeowner policyholders provided certain information and rights regarding homeowners policies, violations under Unfair Trade Practices Act, Homeowners Bill of Rights Act

Summary

SB264 creates the Alabama Homeowners Bill of Rights Act, requiring homeowners insurers to give policyholders clear coverage outlines, explain rights, and ensure fair, timely handling of claims for homeowners policies.

What This Bill Does

It requires insurers to provide policyholders with an outline of coverage and a standard policy checklist at the time of sale and at renewal. It lists a series of rights for policyholders, including clear pricing, accurate advertising, readable policies, fair treatment, cancellation notices and reasons, timely claim payments, access to claim-related reports, ability to file complaints, privacy protections, and the option to reject settlements. Violations would be treated as Unfair Trade Practices Act violations and could lead to penalties; the act does not create a new civil action or expand coverage. It covers specified homeowners policies and includes rules about refunds of unearned premiums and how cancellation affects premium financing.

Who It Affects

• Homeowners policyholders in Alabama who would receive outlines/checklists, gain defined rights, and have processes for complaints and claims clarified.
• Insurance companies writing homeowners policies in Alabama, which would must provide outlines/checklists, comply with the enumerated rights, and face penalties for noncompliance.

Key Provisions

• Provides for the Alabama Homeowners Bill of Rights Act to set minimum rights for homeowners and regulate insurers.
• Scope: Applies to personal lines residential property coverage (condos, dwelling fire, renters, mobile/manufactured homes) and excludes creditor-placed coverage and condo/homeowner associations.
• Policyholders' rights (Section 3): includes competitive pricing, accurate advertising, financial stability, good service, readable policies, fair treatment, license status checks, cancellation notices and reasons, refunds of unearned premiums, renewal change notices, claim payments or settlements, explanations for denied claims, access to non-privileged documents, ability to file complaints, privacy protections, and right to reject settlements.
• Outline of coverage and comprehensive policy checklist (Section 4): insurers must provide an outline and a checklist at or before policy issuance and at renewal, with minimum content such as type/amount of coverage, replacement cost vs actual cash value, exclusions, additional coverages, and a disclaimer that the checklist is informational and does not expand coverage; insurers may use an approved Department checklist or get approval for their own.
• Cancellation and nonrenewal rules: policyholders must receive written cancellation/nonrenewal notices and the reasons for them.
• Refunds: policyholders have the right to a refund of unearned premiums; if financed, the unearned premium may be used to pay the financing loan.
• Regulatory and penalties: violations of the act are treated as violations of the Unfair Trade Practices Act and can lead to penalties including suspension/revocation of the insurer's license or administrative fines.
• Civil action: the act does not create a new civil cause of action against insurers or producers and does not expand policy coverage beyond what the policy provides.
• Effective date: the act would become effective immediately upon governor approval.
• Local fund expenditure note: the bill references expenditure of local funds but is structured to be exempt from local-funds approval requirements under Amend­ment 621.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance