HB8 Alabama 2024 Session

Summary

Primary Sponsor

Chip BrownRepresentative

Republican

Session

Regular Session 2024

Title

Property insurance, policy cancellation, nonrenewal, reduction of coverage, insurers required to provide prior written notice, circumstances under which policy cancellation, nonrenewal or coverage restriction by insurer deemed ineffective.

Summary

HB8 would require property insurers to give insureds at least 90 days' written notice before canceling, not renewing, or restricting coverage, with special rules for transfers, group changes, and government exemptions.

What This Bill Does

It creates a rule that property insurers must provide insureds with at least 90 days' written notice before cancellation, nonrenewal, or coverage restriction. For new coverage issued or renewed after January 1, 2026, this notice becomes at least 30 days before the cancellation or nonrenewal takes effect. If a policy is replaced with a form from the same insurer or moved to a licensed affiliate, the 90-day rule does not apply; instead, the replacement or transfer must maintain same or substantially similar coverage and include at least 30 days' notice of any less favorable terms. The bill also lists specific, limited reasons that justify cancellation and adds notice requirements to the Commissioner for proposed category or group restrictions or nonrenewals, while exempting government-related policies. The act defines key terms and sets several effective dates.

Who It Affects

• Property insurance policyholders (homeowners, condo, dwelling fire, renters, etc.) in Alabama, who would receive longer notice before cancellation, nonrenewal, or coverage changes and gain protections against certain cancellations.
• Insurance companies and their affiliates, who must provide notices to policyholders and the Commissioner, treat affiliate transfers as renewals, and ensure replacement forms or transfers maintain substantially similar coverage.

Key Provisions

• Requires insurers to provide insureds at least 90 days' written notice before cancellation, nonrenewal, or coverage restriction (with exceptions).
• Replacement policy forms or transfers to a licensed affiliate insurer are treated as renewals and not cancellations/nonrenewals, as long as coverage remains the same or substantially similar; at least 30 days' notice of any less favorable terms is required.
• Defines key terms (affiliate transfer, cancellation, coverage restriction, nonpayment, nonrenewal, property insurance, substantially similar).
• Limits cancellation to specific enumerated grounds (nonpayment, misrepresentation, violation of policy terms, fraudulent claims, loss of required group membership, or a material change increasing risk).
• Requires insurers to notify the Commissioner about proposed category/group coverage restrictions or nonrenewals at least 60 days before the effective date (30 days for individual policyholder notices).
• Exempts government-related policies from the act and provides that certain notice protections apply to policies issued after January 1, 2026; provisions may be incorporated into policies if not expressly stated.
• Effective date: October 1, 2024; some provisions apply to policies issued or renewed after January 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance