SB352 Alabama 2010 Session

Summary

Primary Sponsor

Steve French

Republican

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

SB352 would establish the Alabama Homeowners Bill of Rights Act, creating rules that insurers must follow to provide clear policy outlines and enumerated rights to homeowner policyholders, with violations enforceable under the Unfair Trade Practices Act.

What This Bill Does

The bill would require insurers to give homeowners an outline of policy coverage and a standard policy contents checklist at the time of sale and annually thereafter. It lists a broad set of rights for policyholders, including rights related to pricing, advertising, readability, fair treatment, cancellation notices, timely claim payments, access to claim-related documents, complaint filing, and the ability to reject settlements. It applies to all personal lines residential homeowners policies (such as condos, houses, renters, and mobile/manufactured homes) and includes a framework for enforcement and penalties; it does not create a private civil action and violations are treated as Unfair Trade Practices Act violations. The act also requires a detailed outline of coverage to be provided, with language clarifying it is informational and that policy terms govern the contract, and sets up content requirements for the outline and checklist.

Who It Affects

• Policyholders (homeowners) in Alabama — they would gain enhanced information, notice, and rights in dealing with insurers and in handling claims, renewals, and disputes.
• Insurance companies, producers/adjusters, and the Alabama Department of Insurance — insurers would have new duties to provide outlines/checklists and to comply with the listed rights and procedures, with potential penalties for noncompliance under the Unfair Trade Practices Act.

Key Provisions

• Establishes the Alabama Homeowners Bill of Rights Act to govern homeowners policies and insurer relations in Alabama.
• Defines coverage scope to include personal lines residential property policies (condos, dwelling fire, renters, mobile/manufactured homes) and excludes creditor-placed and some association coverages.
• Requires an outline of coverage and a comprehensive policy checklist to be delivered at sale and within 30 days after issuance, or at renewal, using either a department-approved form or an insurer-approved form with minimum content.
• Minimum content for outlines/checklists includes a description of coverage, amount, replacement cost vs. actual cash value, exclusions/limitations, any additional coverages, and a statement that the checklist is informational and does not expand policy terms.
• Outlines must also include a section listing all provisions, coverages, and exclusions offered, whether included or not, and a summary of principal perils and coverages (e.g., fire, wind, flood, theft, etc.).
• Policyholders gain enumerated rights such as competitive pricing, accurate advertising, assurance of financial stability, good service, readability of policies, fair treatment, license status checks, notice of cancellation/nonrenewal with reasons, refunds of unearned premiums, renewal change notices, timely claim payments, access to claim-related documents, complaint filing rights, privacy protections, ability to reject settlements, and a requirement to explain claim denials in writing.
• Violations of the act are treated as violations of the Unfair Trade Practices Act, with possible penalties including suspension or revocation of the insurer’s license or administrative fines; the act does not create a private civil action.
• The act is severable; if any part is invalid, the rest remains in effect; it becomes effective immediately after passage and governor approval, and is exempt from certain local-funds expenditure voting requirements under Amendment 621 due to its status as creating or modifying crime.

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