By Brandon Moseley
Alabama Political Reporter
On Wednesday Alabama Governor Robert Bentley (R) released the Affordable Homeowners Insurance Commission Report.
The report includes recommendations which could make homeowners insurance more available and affordable particularly for those Alabama residents who live South of Interstate 10, where few insurers are willing to write policies due to the high potential for catastrophic sudden losses if a hurricane comes ashore from the Gulf of Mexico.
Following Hurricane Katrina it has become much more difficult to purchase homeowner’s coverage in Baldwin and Mobile Counties and it is especially difficult in coastal communities in those counties. Those communities typically pay much more for their policies that do those of us in the rest of Alabama.
Gov. Bentley said, “Homeowners insurance reform is a complicated issue, and I appreciate the time and sacrifice each commission member gave to address insurance needs. The result is a comprehensive set of recommendations. We will now evaluate these recommendations and study their feasibility. Our goal is to help make homeowners insurance more available and more affordable, and we will move forward with the recommendations that best help us accomplish this.”
Baldwin County Probate Judge Tim Russell chaired the 28 member Commission created by Gov. Bentley. Russell said, “On behalf of the commission members, I am honored to release our final report of recommendations to the Governor.”
Gov. Bentley said, “I support the creation of a center for research and excellence to be used as a statewide source of information for insurance needs and reforms. The center could provide education programs to develop innovative approaches to solving problems associated with insurance issues. Similar centers exist around the country, and I support the creation of one in Alabama to research and address specific insurance needs of people statewide.” “A key to lowering homeowner’s insurance costs on the coast is to reduce the damage to homes from storms. A major priority is to fortify homes by providing mitigation grants to eligible homeowners in coastal counties. I will work with the Restore Act Council to find money available for the mitigation grants for coastal counties.”
Alabama Department of Insurance Commissioner Jim Ridling said, “The Alabama Department of Insurance was pleased to be a part of the Affordable Homeowners Insurance Commission process. We served as a resource for commission members, helping them understand the homeowners insurance marketplace and the department’s role in insurance regulation.”
The report recommendations include:
Creating an Alabama Center for Insurance Information and Research, dedicating $100 Million of Restore Act funds to mitigation efforts, improving building codes, collecting and publishing data to help consumers select an insurance plan with the best coverage and price, require that one state agency be responsible for collecting construction data information across Alabama, consider creating a multi-state compact to spread risk across state lines, directing the Department of Insurance to examine its consumer affairs division and identify areas for improvement, further educate and discuss proper valuation of homeowners’ policies, passing legislation amending existing homeowners captive insurance statutes, encouraging private insurance carriers to write policies currently covered under the Alabama Insurance Underwriting Association (AIUA), encouraging alternative insurance market products such as high-deductible policies, allowing policies with an insured value less than the replacement cost but covering the amount of debt on the home, directing AHIC to study the rate hearing process and mandating a public hearing by the Department of Insurance Commissioner if the homeowner’s premium rate equals or exceeds a specified percentage increase, asking Congress to organize a group of insurance representatives and advocates to study and form solutions for multi-state issues, and form a Multi-State Insurance Alternatives Advisory Committee with insurance representatives and consumers
Gov. Bentley said, “With the success of the insurance reform bills passed in the Legislature in 2012, and with the continued pursuit of mitigation grants, homeowners in Alabama will have more options to reduce insurance costs.”
To read the full report: