Alabama Governor Promotes Homeowner’s Insurance Laws

Alabama’s governor visited the Gulf coast Wednesday to promote new laws designed to make homeowner’s insurance more affordable after hurricanes drove up prices.

Gov. Robert Bentley told Foley residents that he worked with legislators from Mobile and Baldwin counties to enact seven laws during the legislative session that ended in May. The governor, who owns a vacation home on the Alabama coast, made homeowner’s insurance an issue in his 2010 campaign after hurricanes in 2004 and 2005 resulted in insurance companies raising costs for some customers and dropping coverage for others. After taking office, he appointed the Governor’s Affordable Homeowners Insurance Commission to work on the issue.

“These bills will empower consumers and expand their options,” Bentley said.

One new law gives tax credits to insurance companies that write policies in certain areas of Alabama’s two coastal counties, Mobile and Baldwin. Another allows homeowners to create “catastrophe savings accounts,” which would have tax benefits. The account could be used to cover a higher deductible on homeowner’s insurance, which should help hold down the cost of the insurance.

Another new law is a “homeowner’s bill of rights,” which is supposed to help consumers understand more clearly what their policies contain. Another law requires insurance companies to send information to the state Insurance Department about their policies written, premiums collected and losses due to claims. The department will aggregate the data and make it available online by zip code, which is supposed to provide more transparency about insurance rates.

Another law allows Alabama-based insurance companies to make new out-of-state investments, which is supposed to make operating in Alabama more attractive, Bentley said.

One of the laws allows a homeowner to cancel a roofing contract within 10 days of signing the contract if the homeowner’s insurance company says it will not cover part or all of the cost. Another clarifies what insurance fraud is and addresses it with civil and criminal penalties.

“We were one of the few states without an insurance fraud law until we passed this legislation,” Republican Rep. Steve McMillan of Gulf Shores.

Republican Sen. Ben Brooks of Mobile said the laws represent an important step, but more is needed to address insurance problems. Brooks has been one of the leaders on the issue, but is leaving the Legislature in January to become a judge in Mobile County.