This bill pertains to the cancellation, nonrenewal, or restriction of coverage under property insurance policies in Alabama. It mandates that insurers provide written notice to insured individuals at least 30 days prior to the cancellation, nonrenewal, or coverage restriction of the policy, except in cases of nonpayment of premiums, where at least 10 days' notice is required if there is a named creditor loss payee. The bill also specifies that cancellation, nonrenewal, or coverage restriction by an insurer is ineffective under certain circumstances. The bill defines terms such as "affiliate transfer," "cancellation," "coverage restriction," "insurer," "nonpayment of premium," "nonrenewal," "property insurance," and "substantially similar." It also outlines that the act does not apply to property insurance policies issued to government entities or certain organizations associated with government entities.

The bill further details the conditions under which a property insurance policy can be canceled, including nonpayment of premium, material misrepresentation, violation of policy terms, fraudulent claims, failure to maintain required group membership, and substantial increase in risk due to property defects or changes. Insurers are required to notify the Commissioner of Insurance and policyholders 60 days and 30 days in advance, respectively, of any coverage restriction or nonrenewal that applies to a category or group of policyholders not based on prior claims history. The bill also includes provisions regarding the validity of notices, the absence of liability for insurers providing cancellation or nonrenewal information, and the preservation of the remainder of the act if any part is held invalid by a court. The act is set to become effective on October 1, 2024.

Statutes affected:
Introduced: 27-1-2
Engrossed: 27-1-2, 11-30-1