HB272 Alabama 2011 Session

Summary

Primary Sponsor

James E. Buskey

Democrat

Co-Sponsors

Randy DavisHarry ShiverJoe FaustSteve McMillan

Session

Regular Session 2011

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

The Alabama Homeowners Bill of Rights Act would require insurers to provide policy outlines and a rights-based checklist to homeowners and enforce these rights through unfair trade practices rules.

What This Bill Does

Requires insurance carriers to give homeowner policyholders an outline of coverage and a standard checklist of policy contents at the time of sale and annually thereafter. Lists specific rights for policyholders on pricing, advertising, readability, regulation, licensing status checks, cancellation rights, timely claim payments, access to certain claim-related reports, filing complaints, fair treatment, and the ability to reject settlement offers. States that the act does not create a civil cause of action and violations are punishable as violations of the Unfair Trade Practices Act; it does not expand or alter actual policy coverage. Apply to all homeowners personal lines residential property coverage in Alabama (including condos, dwelling policies, renters, and mobile/manufactured homes) with exclusions for creditor-placed coverage and condo/homeowner association property coverage.

Who It Affects

• Homeowners who have or will obtain homeowners insurance in Alabama, who would receive outlines/checklists and gain enumerated rights related to their policies.
• Insurance companies and their agents/producers/adjusters, and the Alabama Department of Insurance, who must provide outlines/checklists, comply with the rights, and may face penalties for violations.

Key Provisions

• Insurers must deliver an outline of coverage and a comprehensive policy checklist to policyholders at sale and no less frequently than at renewals, with the checklist detailing what is included and not included in the policy.
• The act applies to personal lines residential property coverage (condominium, dwelling, renters, mobile/manufactured homes), but excludes creditor-placed coverage and condominium/homeowner association coverage.
• Policyholders have rights related to competitive pricing and marketing, accurate and balanced advertising, assurance of market and company financial stability, helpful service, readable and complete policies, fair regulation, license status checks, cancellation/ nonrenewal notices with reasons, timely claim payments and settlement offers, and the ability to file complaints.
• The Department of Insurance must approve outlines and checklists or approve insurer-created forms that include minimum content such as coverage description, amount, replacement cost vs actual cash value, exclusions, additional coverages, and perils covered.
• The outline/checklist must include an informational disclaimer stating it does not change policy provisions and policy terms govern; policyholders are encouraged to review policies annually with their producer.
• The act does not create a civil cause of action against insurers; violations are treated as Unfair Trade Practices Act violations, potentially leading to suspension or revocation of the insurer’s Authority or fines.
• The bill includes a constitutional note about local expenditure rules, indicating an exception under Amendment 621 of the Alabama Constitution; it becomes effective immediately after governor approved passage.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance