Alabama Coastal Residents Benefit from New Home Insurance Laws
Home insurance ratesÂ are about to become more affordable for Alabama residents living along the state’s Gulf Coast. The governor promoted new laws designed to reduce prices following the varied cost adjustments homeowners experienced following major storms like Hurricane Katrina.
Customers Paid Varied Insurance Rates after Hurricane Katrina
A number of major storms severely impacted Alabama’s Gulf Coast in 2004 and 2005, including Hurricane Katrina and Ivan. The damage to areas like Mobile and Baldwin counties reached into the millions, resulting in significant adjustments to home insurance rates.
TheÂ costs homeowners paid, however, wereÂ not as expected, according to officials. While insurance costs increased for some customers, companies lowered coverage costs for others.
After Gov. Robert Bentley — who owns a vacation home on the Alabama coast — took office, he appointed the Governor’s Affordable Homeowners Insurance Commission to work on the issue. The result was a change to home insurance laws that would even out costs for all residents.
Fair Home Insurance for Alabama Coastal Residents
In his visit to the Alabama Gulf Coast last week, Bentley announced seven new laws that would make home insurance more affordable for residents:
- Tax credits for insurers: One new law gives tax credits to insurance companies that write policies in certain areas of Alabama’s two coastal counties, Mobile and Baldwin, as an incentive to lower costs.
- Catastrophe savings accounts: Another law allows homeowners to create a catastrophe savings accountÂ that allow taxpayers to set aside money to cover uninsured costs like deductibles tax-free.
- Homeowner’s bill of rights: The homeowner’s bill of rights is designed to help consumers understand more clearly what their policies contain.
- Insurers to report policy information with state: Another law requires insurance companies to send information about policies written, premiums collected and losses due to claims to the state Insurance Department. The information will be made available to consumers to provide transparency about home insurance rates.
- Roofing contract cancellations: One law will allow homeowners to cancel roofing contracts within 10 days of signing the contract, if their insurance company says it will not cover part or all of the cost.
- Insurance fraud: The insurance fraud law clarifies what insurance fraud is and addresses it with civil and criminal penalties.
The final law allows Alabama-based insurance companies to make out new out-of-state investments, which is said to make operating in Alabama more attractive.