SB5 Alabama 2010 Session

Summary

Primary Sponsor

Ben H. Brooks

Republican

Co-Sponsor

Trip Pittman

Session

Regular Session 2010

Title

Property insurance, hurricane deductible only applied on damages from named hurricane or tropical storm, certain personal lines insurance policies to offer voluntary buy-back provision, penalties

Summary

SB5 would limit hurricane deductibles to damage from named storms and require buy-back options for non-hurricane wind/hail deductibles in personal lines, with penalties for violations.

What This Bill Does

It prohibits applying a hurricane deductible to property damage unless the damage came from a named hurricane or tropical storm. It requires personal lines policies that use a wind/hail deductible not tied to named storms to offer a voluntary, actuarially sound buy-back provision, capped at 1% of dwelling limits. The Insurance Commissioner can grant waivers from the buy-back requirement through a formal process, and violations can incur penalties up to $10,000 per violation and possible license actions. The Department of Insurance would create rules to implement the law, and it takes effect immediately after passage.

Who It Affects

• Property policyholders in Alabama (homeowners and other dwelling/building owners) whose deductibles could be affected by the hurricane/damage rules.
• Insurance companies that sell personal lines policies with wind/hail deductibles, because they must offer a buy-back provision and may face penalties or waivers.

Key Provisions

• Prohibits hurricane deductibles for property damage unless the damage is from a named hurricane or named tropical storm, for dwelling or building insurance.
• Requires personal lines policies offering a wind/hail deductible from non-named-storm sources to provide a voluntary buy-back provision, actuarially sound, no greater than 1% of dwelling limits.
• Commissioner of Insurance may grant waivers from the mandatory buy-back provision through a defined filing and documentation process.
• Violations can incur penalties up to $10,000 per violation and may lead to license revocation or suspension.
• Department of Insurance must promulgate rules to implement the act.
• Effective immediately after passage.

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

Subjects

Property, Real and Personal