SB420 Alabama 2012 Session

Summary

Primary Sponsor

Paul Bussman

Republican

Co-Sponsor

Clay Scofield

Session

Regular Session 2012

Title

Insurance, residential roofing contract cancellation prior to midnight of 5th business day, exceptions

Summary

SB420 lets a homeowner cancel a residential roofing contract paid from an insurance claim within five business days after the insurer notifies that all or part of the loss isn’t covered, with required cancellation forms and protections for both parties.

What This Bill Does

It would allow cancellation of the contract prior to midnight on the fifth business day after the insured receives written notice from the insurer that all or any part of the claim or contract is not a covered loss. It requires the contractor to provide a boldfaced statement about cancellation rights and a detachable notice of cancellation form before entering the contract. It limits when payments can be made, allowing payment only after the five-day cancellation period unless emergency services were performed, and it makes non-emergency charges unenforceable if the insured cancels; it also prohibits the contractor from representing the insured in insurance claims. It becomes law on the first day of the third month after passage and approval by the Governor.

Who It Affects

• Homeowners/insureds with residential real estate who enter a roofing contract paid from an insurance claim who would gain the right to cancel within five business days after receiving insurer notice of non-coverage.
• Residential roofing contractors who must provide cancellation information and forms, may not require non-emergency payment during the cancellation period, and must not represent or negotiate on behalf of the insured in insurance claims.
• Insurance companies, whose written notice to the insured that all or part of the claim is not covered triggers the cancellation period.

Key Provisions

• Section 1 defines terms: residential real estate (1-4 family homes), residential roofing contractor, and roof system (covering, sheathing, weatherproofing, framing, ventilation, insulation).
• Section 2(a) grants the insured the right to cancel the contract before midnight on the fifth business day after receiving insurer notice of non-coverage; cancellation must be written to the contractor and notice by mail is effective when mailed.
• Section 2(b) requires the contractor to provide before entering the contract a boldface statement of at least 10-point type about cancellation rights and a detachable NOTICE OF CANCELLATION form with specific content describing how to cancel.
• Section 2(c) restricts payments: no payments may be demanded before the five-day period ends except for emergency services; emergency payments may be collected if the work was written as necessary to prevent damage; non-emergency fees are not enforceable if cancellation occurs; contractors may not represent or negotiate on behalf of the owner in an insurance claim.
• Section 3 specifies the act becomes effective on the first day of the third month after passage and approval.

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