Alabama DOI Enhances Protections Against Policy Cancellations and Nonrenewals

The Alabama Department of Insurance has announced a significant change in regulations affecting property insurers in the state. According to a recent bulletin, property insurers will no longer have the authority to cancel or non-renew policies due to natural disasters or losses that do not pertain to the specific line of business.

This new regulation applies to both personal and commercial property insurance carriers, as well as automobile insurers that are admitted in Alabama. For new policies initiated after February 1, 2026, and for renewals after April 1, 2026, insurers are prohibited from raising premiums or imposing surcharges as a result of claims related to disasters, weather events, or losses that fall outside their line of business.

Interestingly, the Department of Insurance did not provide specific examples of the types of losses that would be affected by this change, nor did it clarify the motivations behind the revision of existing regulations. Attempts to reach officials for further comment were unsuccessful, leaving industry representatives puzzled about the implications of this new rule.

It is important to note that this regulation does not prevent insurers from canceling or non-renewing policies in cases of misrepresentation or fraud by the insured. Additionally, insurers are still allowed to discontinue claims-free discounts after a claim has been filed.

The Department of Insurance has also indicated that carriers with rating rules that do not align with the new regulation must file an amendment to their rating manuals through the System for Electronic Rate and Form Filing (SERFF).

For any inquiries regarding this new regulation, individuals can reach out via email at rates.forms@insurance.alabama.gov.

Topics
Alabama

The Alabama Department of Insurance has announced a significant change in regulations affecting property insurers in the state. According to a recent bulletin, property insurers will no longer have the authority to cancel or non-renew policies due to natural disasters or losses that do not pertain to the specific line of business.

This new regulation applies to both personal and commercial property insurance carriers, as well as automobile insurers that are admitted in Alabama. For new policies initiated after February 1, 2026, and for renewals after April 1, 2026, insurers are prohibited from raising premiums or imposing surcharges as a result of claims related to disasters, weather events, or losses that fall outside their line of business.

Interestingly, the Department of Insurance did not provide specific examples of the types of losses that would be affected by this change, nor did it clarify the motivations behind the revision of existing regulations. Attempts to reach officials for further comment were unsuccessful, leaving industry representatives puzzled about the implications of this new rule.

It is important to note that this regulation does not prevent insurers from canceling or non-renewing policies in cases of misrepresentation or fraud by the insured. Additionally, insurers are still allowed to discontinue claims-free discounts after a claim has been filed.

The Department of Insurance has also indicated that carriers with rating rules that do not align with the new regulation must file an amendment to their rating manuals through the System for Electronic Rate and Form Filing (SERFF).

For any inquiries regarding this new regulation, individuals can reach out via email at rates.forms@insurance.alabama.gov.

Topics
Alabama