HB275 Alabama 2025 Session

Summary

Primary Sponsor

Mack N. ButlerRepresentative

Republican

Session

2025 Regular Session

Title

Alabama insurance regulations; to define replacement cost

Summary

HB275 would define 'replacement cost' for Alabama dwelling insurance to include quality factors and require rule updates by 2026.

What This Bill Does

It establishes a statutory definition for replacement cost used in dwelling coverage rules. It defines replacement cost as the amount needed to replace or rebuild the dwelling or repair damages using materials of similar kind and quality, with quality covering reliability, durability, performance, safety, and conformance to specifications. It requires the Insurance Commissioner to revise the department's rules by January 1, 2026 to reflect this definition. The act takes effect on July 1, 2025.

Who It Affects

• Homeowners with dwelling insurance, whose replacement cost estimates and payouts may be based on the new definition.
• Insurance companies, adjusters, and agents, who must apply the revised definition when handling dwelling coverage and claims.
• Alabama Department of Insurance and its Commissioner, who must revise rules by January 1, 2026 to implement the new definition.

Key Provisions

• Section 1(a): Defines 'replacement cost' for dwelling coverage as the amount to replace or rebuild the dwelling or repair damages with materials of similar kind and quality, where 'quality' includes reliability, durability, performance, safety, and conformance to specifications of the damaged materials.
• Section 1(b): The Commissioner must revise the Department's rules by January 1, 2026 to comply with the new definition.
• Section 2: The act becomes effective on July 1, 2025.

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