HB331 Alabama 2015 Session

Updated Feb 24, 2026

Summary

Primary Sponsor: Rod Scott
Democrat
Session: Regular Session 2015
Title: Schools, public K-12, State Insurance Fund, insurance for reconstruction, risk manager of Finance Director required to acquire gap coverage to reconstruct certain destroyed school buildings with materials superior to original, Sec. 41-15-4 am'd.
Summary: The bill creates a gap and gap-plus insurance program for certain public school buildings to be rebuilt with superior materials and potentially larger size after a total loss, funded by premiums and overseen by the Risk Manager and Finance Director.
What This Bill Does
It updates the State Insurance Fund rules to create gap coverage and gap-plus coverage programs. These programs would let eligible public school buildings damaged by a covered peril be rebuilt with materials superior to the original and possibly larger, if the loss is at least 80%. Gap coverage can upgrade construction type (from ISO 1-3 to 4) and allow some extra square footage; gap-plus covers additional costs like a new site, underground utilities, and paving up to 10% of the insured value. Premiums for this coverage would be paid annually from the Public School Fund, and the Risk Manager, with Finance Director approval, would set rules and premiums; the Department of Finance would also handle salvage provisions and annual property-related duties.

Who It Affects
Public K-12 school systems and public two-year postsecondary institutions that own or control eligible buildings would be required to participate in gap and gap-plus coverage for qualifying properties.
The Department of Finance, Division of Risk Management, and the State Insurance Fund would administer the program, determine premiums, draft guidelines, and handle salvage and related administrative tasks.

Key Provisions
Adds gap coverage and gap-plus coverage to the State Insurance Fund for eligible public school buildings damaged beyond 80 percent of insured value.
Gap coverage allows upgrading construction type (from ISO 1-3 to ISO 4) and adding preapproved extra square footage, contingent on an 80%+ loss and other criteria.
Gap-plus coverage covers additional normally uncovered costs (e.g., new site preparation, underground wiring, paving) up to 10% of the insured value, with an 80%+ loss trigger.
Premiums for gap and gap-plus coverage are paid annually from the Public School Fund to the Department of Finance, Division of Risk Management, and premiums must be actuarially sound.
The risk manager, with Finance Director approval, will draft rules, guidelines, endorsements, and determine coverage parameters for the program.
The Department of Finance may salvage or take title to insured items, or deduct salvage value from insurance proceeds, when adjusting losses.

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