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Alabama Homeowners 'Bill of Rights' Requires Policy Outlines and Checklists

August 14, 2012 AAIS Advisory notice

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NOTE: The format of the AAIS Advisory has changed, starting in June 2012. Notices are now posted individually as they arise, then combined in a periodic email message.

As of July 1, 2013, insurers writing homeowners and other types of residential property insurance in Alabama will be required to provide policyholders with an outline of coverages and a checklist of coverages under each policy.

Under the newly enacted Alabama Homeowners Bill of Rights Act, insurers may use an approved outline and checklist to be promulgated by the Alabama Department of Insurance, or they can develop their own and file them for approval by the department.

AAIS is awaiting the department''s action before deciding whether it needs to take action on behalf of program affiliates in affected lines. (The requirement extends to homeowners, dwelling properties, and mobile home policies, but not to policies issued for condominium or homeowners associations.)

The outline is to provide a brief description of the type of coverage provided in the policy, amount of coverage, and whether the coverage is replacement cost or actual cash value. It is also to provide summaries of policy exclusions, limitations, and endorsements.

The checklist is to include, at a minimum, the amount of property coverage for the principal residence, other structures, and personal property, and whether they are insured against the following perils: fire, lightning, explosion, wind and hail, flood, earthquake, collapse, mold, and theft.

The checklist is also to indicate whether the policy includes a named windstorm deductible or any of the following additional coverages: debris removal, loss assessment, additional living expense, personal liability, medical payments, and building ordinance or law.

AAIS Advisory notices are posted periodically to announce AAIS product developments, and to provide news items that are relevant to our program users. Advisory notices are news summaries that paraphrase documents which should be consulted directly for complete, authoritative information.

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