HB166 Alabama 2012 Session

Summary

Primary Sponsor

Yvonne Kennedy

Democrat

Co-Sponsors

Jim BartonSteve McMillanAlan BakerChad FincherJoe FaustVictor GastonRandy DavisJames E. BuskeyDavid Sessions

Session

Regular Session 2012

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

HB166 creates the Alabama Homeowners Bill of Rights Act, requiring insurers to provide clear outlines of coverage and policy checklists to homeowners and to honor specific rights, with violations enforceable under the Unfair Trade Practices Act.

What This Bill Does

It requires insurance carriers to give homeowner policyholders an outline of coverage and a comprehensive policy checklist at issuance or within 30 days thereafter. It also sets out a list of policyholders' rights regarding pricing, advertising, readability, regulatory oversight, licensing status, cancellation notices, timely claim payments, access to certain reports, ability to file complaints, fair treatment, and rejection of settlement offers. Violations of these requirements would be treated as violations of the Unfair Trade Practices Act and enforced by the Department of Insurance, with no private right of action created. The act applies to personal lines residential property insurance (such as condo, dwelling fire, renters, and mobile home policies) and excludes creditor-placed and HOA property insurance, with new policies effective July 1, 2013 and existing policies at renewal on or after July 1, 2013.

Who It Affects

• Homeowners with homeowner insurance policies in Alabama, who would receive an outline of coverage and a policy checklist and gain defined rights about pricing, readability, cancellation, claim handling, and complaints.
• Insurance companies and licensed producers in Alabama, which must provide outlines and checklists, post them online, honor the policyholder rights, and potentially face penalties for violations.

Key Provisions

• Requires an outline of coverage and a comprehensive policy checklist to be delivered to the policyholder at issuance, within 30 days after issuance, or included in the policy when issued or mailed.
• Outline/checklist must include: type and amount of coverage (replacement cost vs. actual cash value), exclusions and limitations, summaries of riders/endorsements, and a detailed list of covered perils and property protections.
• Policyholders are informed that the checklist is informational and does not change policy terms, and they are encouraged to review the policy annually with their insurer.
• Policyholders have rights concerning pricing, advertising, financial assurances, readable policies, ability to inquire about licensing of personnel, cancellation notice and reasons, timely claim payment, copies of claim-related reports, filing complaints, fair treatment, and rejecting settlement offers, among others.
• Applies specifically to personal lines residential property insurance (condo, dwelling fire, renters, mobile/manufactured homes) and excludes creditor-placed and HOA insurance.
• Violations are enforceable under the Unfair Trade Practices Act, with possible penalties including suspension or revocation of the insurer’s authority or administrative fines.
• The act includes a local-funds provision under Amendment 621, stating it is exempt because it defines a new crime or amends a crime definition, thus not requiring additional local funding approvals.
• Effective dates set: new business policies with effective dates on or after July 1, 2013; existing policies become effective at renewal on or after July 1, 2013.

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