The Alabama House of Representatives passed a bill Thursday requiring that insurance companies pay claims to homeowners within 14 days of completion of insured repairs.
House Bill 139 was sponsored by State Rep. K.L. Brown, R-Jacksonville.
Rep. Brown said that there have been instances where the insurance company approved the claim. The homeowner hired a contractor to do the work. The contractor finished the work and the insurance company held the check for months, so the contractor is waiting to get paid. and he is unable to pay his subs for their work. This bill prevents them from holding the check for months.
HB139 would require a lender to provide notice to an insured when an insurance payment is withheld and the conditions for release of the insurance payment. It also requires a lender to release an insurance payment or provide the detailed conditions for release of the payment upon request of the payment by an insured, and to charge a lender interest on the insurance payment for failure to properly release an insurance payment or provide the detailed 16 conditions for release.
The Alabama House of Representatives passed the bill 99 to 0.
It now goes to the Senate where it has been referred to the Senate Committee on Banking and Insurance.