Under existing law, Alabama homeowners insurance providers are not prohibited from offering coverage for sinkhole loss but are not required to do so. A "sinkhole" is the collapse of ground cover most often caused when certain types of underground bedrock is dissolved by underground water. This bill would require all homeowners insurance providers authorized to write homeowners policies in the state to cover catastrophic ground cover collapse in all homeowners insurance policies and to offer coverage for sinkhole loss at the policyholder's option for an additional premium, subject to certain restrictions and deductibles imposed by the insurance provider. This bill would establish a procedure for investigating a claim for sinkhole loss coverage in order to determine the cause and extent of damage to the property. This bill would provide the rights and obligations of the insurance provider, the homeowner, and the professional service providers engaged in the investigation process related to providing notices, filing reports, and paying claims based on the investigative conclusions.

Statutes affected:
Introduced: 34-41-3