The Alabama Guide to Property Insurance Claims: Deadlines, Laws, and FAQs

“Property insurance” is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and every hazard or cause and against loss consequential upon such loss or damage other than noncontractual legal liability for any such loss or damage.

Ala. Code § 27-5-5 (1975).

The following shall serve as the minimum standards to be followed by the Alabama Department of Insurance in exercising the department’s powers and duties in regulating insurance companies pursuant to Chapter 12. The Department of Insurance and insurance companies shall post this list or an electronic link of this list on their respective websites. These standards include the following:

(1) Policyholders shall have the right to competitive pricing practices of insurers as prescribed by applicable federal or state insurance law and regulation.

(2) Policyholders shall have the right to insurance advertising and sales approaches that provide
representative information on the policy in accordance with Title 27, Chapter 12, Code of Alabama 1975.

(3) Policyholders shall have the right to assurance that the insurance market in general and their
insurance company in particular are financially stable as provided in Section 27-12-7, Code of Alabama 1975.

(4) Policyholders shall have the right to receive service from licensed producers in accordance with
Title 27, Chapter 7, Code of Alabama 1975, and to request the license status of an insurance company or producer.

(5) Policyholders shall have the right to a policy as prescribed in Title 27, Chapter 14, Code of Alabama 1975, to receive a complete policy, and to request a duplicate or replacement policy, if needed.

(6) Policyholders shall have the right to receive in writing from their insurance company the reason
for any cancellation of coverage and a minimum number of days’ notice of cancellation of coverage, subject to applicable federal or state insurance law and regulation.

(7) Policyholders shall have the right to cancel their policy and receive a refund of any unearned premium. If a policy was funded by a premium finance company, the unearned premium will be returned to the premium finance company to pay toward the policyholder’s financing loan.

(8) Policyholders shall have the right to a written notification, at renewal, describing changes in their insurance contract language that are applicable to the renewal period.

(9) Policyholders shall have the right, in the event of a claim, to reject any settlement amount
offered by the insurance company.

(10) Policyholders shall have the right to select their licensed contractor or vendor to repair, replace, or rebuild damaged property covered by the insurance policy.

(11) Policyholders shall have the right to file a written complaint against any insurance company with
the Department of Insurance and to have that complaint reviewed by the Department of Insurance.

(12) Policyholders shall have the right to file a written complaint against any insurance producer with
the Department of Insurance and to have that complaint reviewed by the Department of Insurance.

Ala. Code § 27-22-42 (2012); Ala. Act No. 2012-510.

(a) No homeowners personal lines residential property coverage insurance policy shall be delivered or issued for delivery in this state unless an appropriate outline of coverage and comprehensive policy checklist have been delivered to the policyholder prior to issuance, within 30 days after issuance of the policy under separate cover, or included in the policy when issued or mailed. The comprehensive policy checklist shall contain a list of provisions and elements, whether or not they are included in the policy being issued, in a format that allows the insurer to indicate what is and what is not included in the policy being issued. The outline of coverage and comprehensive checklist shall provide information on the policy and may, but is not required to, include coverage by endorsement.

(b) To be in compliance with this section, an insurer may use an approved outline of coverage and comprehensive policy checklist, to be promulgated by the Alabama Department of Insurance. If a company wishes to create and use its own outline of coverage and comprehensive policy checklist, it must be approved by the Alabama Department of Insurance and include, at a minimum, the following:

(1) A brief description of the type of coverage provided in the policy, amount of coverage, and whether the coverage is replacement cost or actual cash value.

(2) A summary statement of the principal exclusions and limitations or reductions contained in the policy and any other limitations or reductions.

(3) A summary of any additional coverages provided through any rider or endorsement that accompanies the policy, amount of that coverage, and whether the coverage is replacement cost or actual cash value.

(c) In addition, an insurer must include the following language on the outline of coverage and comprehensive policy checklist:

“The following is an outline of coverage and comprehensive policy checklist of your insurance policy and is for informational purposes only. Alabama law prohibits this checklist from changing any provisions of the insurance contract which is the subject of this checklist. Any endorsement regarding changes in types of coverage, exclusions, limitations, reductions, deductibles, coinsurance, renewal provisions, cancellation provisions, surcharges, or credits is not included in this checklist, unless otherwise indicated. This checklist does not operate to expand coverage beyond the coverage provided in the policy. If there is a contradiction between this checklist and the policy, the terms of this policy govern.

“Policyholders should read their policy thoroughly. Policyholders should review their insurance policy annually with their insurance producer to ensure they are adequately covered.”

(d) Also, as part of the outline of coverage and comprehensive policy checklist, an insurance company shall include a section of the document which contains a checklist of provisions, coverage, and exclusions offered within a policy, whether or not they have been included, or accepted, as part of the policy being issued, or considered. The comprehensive policy checklist shall include, at a minimum, the following:

(1) Property coverage for the principal premises shown in the declarations.

(2) Property coverage for other structures on the residence premises.

(3) Whether the principal premises and other structures are insured against the following perils:

a. Fire.

b. Lightning.

c. Explosion.

d. Wind and hail.

e. Flood.

f. Earthquake.

g. Collapse.

h. Mold.

i. Theft.

(4) Personal property and contents coverage and the amount of or percentage of coverage.

(5) Whether personal property and contents are insured against the following perils:

a. Fire.

b. Lightning.

c. Explosion.

d. Wind and hail.

e. Flood.

f. Earthquake.

g. Collapse.

h. Mold.

i. Theft.

(6) Whether the policy provides the following additional coverage:

a. Debris removal.

b. Loss assessment.

c. Additional living expenses.

d. Personal liability coverage.

e. Medical payments coverage.

f. Named windstorm deductible.

g. Building and ordinance or law coverage.

Ala. Code § 27-22-43 (2012).

.02 Purpose. The purpose of this chapter is to set forth minimum standards for the investigation and disposition of property and casualty claims arising under contracts or certificates issued to residents of the State. It is not intended to cover claims involving workers’ compensation, fidelity, suretyship or boiler and machinery insurance.
Evidence of violation of this chapter and the provisions contained herein shall be utilized for the purpose of
administrative and regulatory proceedings conducted by the
Department of Insurance and shall not be utilized for any other purpose or admissible as evidence for any purpose in any civil or criminal court proceeding. This is merely a clarification of original intent and does not indicate any change of position.

.03 Definitions. In addition to the definitions contained in the Trade Practices Act and Section 27-1-2, Code of Ala. 1975, which are hereby incorporated by reference, the
following definitions shall apply for purposes of this chapter:

(a) CLAIMANT. A first party claimant, a third party claimant, or both and includes the claimant’s designated legal representative and includes an adult member of the claimant’s immediate family designated in writing by the claimant.

(b) CLAIM FILE. Any retrievable electronic file, paper file or combination of both relative to the claim that may contain: The notice of claim, claims forms, proof of loss or other form of claim submission, settlement demands, accident reports, police reports, adjusters logs, claim investigation
documentation, inspection reports, supporting bills, estimates and valuation worksheets, medical records, correspondence to and
from insureds and claimants or their representatives, notes, contracts, declaration pages, certificates evidencing coverage under a group contract, endorsements or riders, work papers, any written communication, any documented or recorded telephone communication related to the handling of a claim, including the investigation, payment or denial of the claim, copies of claim checks or drafts, or check numbers and amounts, releases, all
applicable notices, correspondence used for determining and concluding claim payments or denials, subrogation and salvage documentation, any other documentation, maintained in a paper or electronic format, necessary to support claim handling activity,
and any claim manuals or other information necessary for reviewing the claim.

(c) DAYS. Calendar days calculated as set forth in the Alabama Rules of Civil Procedure.

(d) DOCUMENTATION. All pertinent communications,
transactions, notes, work papers, claim forms, photographs, bills and explanation of benefits forms and all other records relative to the claims.

(e) FIRST PARTY CLAIMANT. An individual, corporation, association, partnership or other legal entity
asserting a policy coverage as applicable as a named insured,
policyholder, or a person insured by definition under an insurance policy or insurance contract arising out of the occurrence of a loss or a loss contingency covered by the policy
or contract.

(f) INSURER. As set forth in Section 27-1-2, Code of Ala. 1975.

(g) INVESTIGATION. All activities of an insurer directly or indirectly related to the determination of
liabilities under coverages afforded by an insurance policy or insurance contract.

(h) NOTICE OR NOTIFICATION OF A CLAIM. Any notice or notification, whether in writing, verbal or other means acceptable under the terms of an insurance policy to an insurer
or its producer, by a claimant, which reasonably apprises the insurer of the facts pertinent to a claim.

(j) RECEIPT DATE. The date received which could be
confirmed either by facsimile, electronic or other recognized
confirmation or signed certified return mail receipt.

(l) SERVICE REPRESENTATIVE. As defined in Section 27-7-1.

(m) THIRD PARTY CLAIMANT. Any person other than a first party claimant asserting a claim against any person under a policy or certificate of an insurer.

(n) WRITTEN COMMUNICATIONS. All correspondence, regardless of source or type, that is materially related to the handling of the claim.

.04 File and Record Documentation. Each insurer’s claim files for policies are subject to examination by the
Commissioner of Insurance or by the Commissioner’s duly appointed designees. To aid in such examination:

(a) The insurer shall maintain claim files that are accessible and retrievable for examination. An insurer shall be able to provide the claim number, line of coverage, date of loss, and date and amount of payment. They shall also be able
to provide the same information (except date and amount of
payment) for all claims closed without payment. This data must
be available for all open and closed files for the current year and the five (5) preceding years, in order to permit reconstruction of the insurer’s activities relative to each
claim.

(b) Each relevant document within the claim file shall reflect as to date received, date processed or date
mailed.

(c) Format of Records and Disaster Recovery.

1. Any record required to be maintained by an insurer may be in the form of paper, photograph, magnetic, mechanical or electronic medium, or any process that accurately forms a durable reproduction of the record, so long as the record is capable of duplication to a hard copy that is legible. Documents that are produced and sent to an insured by use of a template and an electronic mail list shall be considered to be
sufficiently reproduced if the insurer can provide proof of mailing of the document and a copy of the template. Documents that require the signature of the insured or insurer’s producer shall be maintained in any format listed above provided evidence of the signature is preserved in that format.

2. The maintenance of records in a computer-based format shall be archival in nature, so as to preclude the alteration of the record after the initial transfer to a computer format. Upon request of an examiner, the records shall be capable of duplication to a hard copy that is legible. The records shall be maintained according to procedures developed and adhered to by the insurer. The procedures shall be made available to the commissioner during an examination.

3. Photographs, microfilms, or other
image-processing reproductions of records shall be equivalent to the originals and may be certified as the same in actions or proceedings before the commissioner.

4. The insurer shall maintain disaster preparedness or disaster recovery procedures that include provisions for the maintenance or reconstruction of original or duplicate records at another location. These procedures shall be provided for review during an examination.

(d) Every insurer, upon receipt of any written inquiry from the Insurance Department respecting a claim shall within ten (10) working days of receipt of such inquiry furnish the Department with an adequate written response to the inquiry. This response shall be addressed to the Department employee or representative making the request.

.05 Misrepresentation of Policy Provisions.

(1) No insurer shall deny a claim based on a first party claimant’s failure to exhibit the damaged property without the proof of demand and of an unfounded refusal by the first party claimant to do so and unless the insurer has documented breach of relevant policy provisions in the claims file.

(2) No insurer shall deny a claim based upon the failure of a first party claimant to give proper written notice of loss within a specified time limit unless the denial is based
upon a specific policy provision or the first party claimant’s failure to give notice constitutes a breach of the first party claimant’s policy.

(3) No insurer shall indicate to a first party claimant on a payment draft, check or in any accompanying letter
that said payment is “final” or “a release” of any claim unless the policy limit has been paid or there has been a compromise settlement agreed to by the first party claimant and the insurer as to coverage and amount payable under the policy.

(4) No insurer shall issue checks or drafts in partial settlement of a loss or claim under a specific coverage
that contains language purporting to release the insurer or its insured from total liability.

.06 Failure to Acknowledge Pertinent Communications.

(1) Every insurer, upon receiving notification of a first party claim from a first party claimant shall, within fifteen (15) days, acknowledge the receipt of such notice unless
payment is made within that period of time. If an acknowledgement is made by means other than writing, an appropriate notation of the acknowledgement shall be made in the claim file of the insurer and dated. Notification given to a
producer of an insurer shall be notification to the insurer.
Acknowledgement by a producer of an insurer as required above shall satisfy the requirements of this paragraph.

(2) Every insurer, upon receipt of any inquiry from the insurance department respecting a claim shall, within ten (10) working days of receipt of such inquiry, furnish the department with an adequate response to the inquiry in duplicate. This response should be addressed to the department employee or representative making the request. Furthermore, the insurer shall furnish written notification to the department employee on the final outcome respecting this claim if it is not resolved at the time of the initial response.

(3) A reply shall be made within fifteen (15) days on all other pertinent written communications from a first party claimant which requests a response.

(4) Every insurer, upon receiving notification of a first party claim from a first party claimant, shall within fifteen (15) days mail or otherwise provide necessary claim
forms, instructions or reasonable assistance so that first party
claimants can comply with the policy conditions and the insurer’s reasonable requirements. Compliance with this paragraph shall constitute compliance with Paragraph (1) of this rule.

.07 Standards for Prompt, Fair and Equitable Settlements Applicable to All Insurers.

(1) Within thirty (30) days, or the number of days specified in the policy, after receipt by the insurer of
properly executed proofs of loss, the first party claimant shall be advised of the status of acceptance or denial of the claim by the insurer. No insurer shall deny a first party claim on the grounds of a specific policy provision, condition or exclusion
unless reference to such provision, condition, or exclusion is included in the denial. The denial may be given to the first party claimant in writing, verbally or electronically (e-mail).
If verbal, the file should clearly indicate the denial and reasons for the denial. If the denial is in writing or electronic (e-mail), the file should contain a copy of the denial letter or e-mail. If after the first party claim is
denied, the first party claimant requests a written denial, a written denial shall be mailed within a reasonable time. Where there is a reasonable basis supported by specific information available for review by the insurance regulatory authority that the first party claimant has fraudulently caused or contributed to the loss, the insurer is relieved from the requirements of
this paragraph; provided, however, that the first party claimant shall be advised of the acceptance or denial of the first party claim within a reasonable time or any time limit specified in the policy for full investigation after receipt by the insurer of a properly executed proof of loss.

Ala. Admin. Code r. 482-1-125.

.02 Purpose and Scope. This chapter implements a non- adversarial alternative dispute resolution procedure for a facilitated claim resolution conference prompted by the need for effective, fair, and timely handling of personal lines insurance claims arising out of damages to residential property caused by hurricanes , tropical storms, tornados, and other disasters. The Commissioner will issue a bulletin indicating when the provisions of this Chapter apply. Before resorting to these procedures, insureds and insurers are encouraged to resolve claims as quickly and fairly as possible. The procedure established by this chapter is available to all first party claimants prior to engaging counsel, or commencing either litigation or the appraisal process, who have residential property lines claims resulting from damage occurring in the State of Alabama. This chapter does not apply to commercial insurance, private passenger motor vehicle insurance or to liability coverage contained in insurance policies.

.03 Definitions. The following definitions apply to the terms of this chapter as used herein:

(1) CLAIM. Any matter on which there is a dispute or for which the insurer has denied payment due to claim arising out of damages to residential property caused by
hurricanes and tropical storms, tornados, and other disasters. Unless the parties agree to mediate a claim involving a lesser amount, a “claim” involves the insured requesting $500 or more to settle the dispute or the difference between the positions of the parties is $500 or more, in either case notwithstanding any applicable deductible. “Claim” does not include a dispute with respect to which the insurer has reported allegations of fraud, based on an investigation by the insurer, to the Department.

(2) DEPARTMENT. The Alabama Department of Insurance.

(3) INSURER. An insurer, as defined in Section 27-1-2, authorized to provide property insurance on risks located in the State of Alabama.

(4) MEDIATOR. An individual selected by the Department and approved by the parties to mediate disputes pursuant to this chapter. The mediators will be selected from a panel of mediators approved by the Alabama Department of Insurance.

(5) PARTY OR PARTIES. The insured and his or her insurer, including the Alabama Insurance Underwriting Association (Beach Pool), the National Flood Insurance Program and insurers who write flood insurance in conjunction with the National Flood Insurance Program, when applicable.

.04 Notification of Right to Mediate. Within sixty (60) days of the time an
insurer receives a first-party claim, and provided the claim has not been resolved, the insurer shall mail to the insured a mediation notice of the right to mediate disputed claims.
Mediation notification shall be in writing and shall be legible, conspicuous, and printed in at least 12-point type. The notice shall contain the following statement: “The Commissioner of Insurance for the State of Alabama, has adopted regulations to facilitate the fair and timely handling of residential property insurance claims arising out of the hurricanes, tropical storms, tornados, and other disasters. The regulations give you the opportunity to attend a mediation conference with your insurer in order to settle any
dispute you may have with your insurer about your hurricane or tropical storm claim. You can start the mediation process 21 days after the date of this mediation notice by calling the Alabama Department of Insurance at the Consumer Services Division, 334-241-4143; by faxing a request to the Alabama Department of Insurance at 334-240-4409; or by mail directed to: Consumer Services Division, 201 Monroe Street, Suite 1700, Montgomery, Alabama 36130-3351. An independent mediator selected by the Alabama Department of Insurance and approved by you and the insurance company, who has no connection with the insurance company, will be in charge of the mediation conference.”

.05 Request for Mediation. If the claim has not been resolved within 21 days from the date of the Mediation Notice as required in Rule 482-1-135-.04, an insured or the insurer may request mediation by calling the Alabama Department of Insurance Consumer Services Division at 334-241-4143; by faxing a request to the Department at 334-240-4409; or by mail directed to: Consumer Services Division, 201 Monroe Street, Suite 1700, Montgomery, Alabama 36130-3351. The Department shall notify the insurer within 48 hours of the Department’s receipt of a request. The insured will provide the following information to the Department, if known:

(a) Name, address, and daytime telephone number of the insured and location of the property if different from the address given.
(b) The claim and policy number for the insured.
(c) A brief description of the nature of the dispute.
(d) The name of the insurer and the name, address and phone number of the contact person for scheduling mediation.
(e) Information with respect to any other policies of insurance that may provide coverage of the insured property for named perils such as flood or windstorm.

.06 Scheduling of Mediation. The Department will select a mediator and schedule the mediation conference, both subject to the approval of the parties. The
Department will attempt to facilitate reduced travel and expense to the parties and the mediator when selecting a mediator and scheduling the mediation conference. The
Department shall confer with the mediator and obtain the approval of all parties prior to scheduling a mediation conference. The conference shall be scheduled on a mutually convenient date for the parties, not greater than 60 days from the date the Department received the request for the mediation unless the parties agree to a later date. The Department shall notify each party in writing of the agreed upon date, time and place of the mediation conference at least 10 days prior to the date of the conference. The insurer shall notify the Department as soon as possible after settlement of any claim that is scheduled for mediation pursuant to this chapter.

.07 Mediation Conference.

(1) The insurer will produce at the conference a copy of the policy and will bring the entire claims file. The insurer is not required to allow the insured to review or copy the claims file. The representative of the insurer attending the conference must be familiar with and know the facts and circumstances of the claim and have authority to settle the claim on behalf of the insured. The insurer will be deemed to have failed to appear if the insurer’s representative lacks authority to settle the claim and the ability to disburse the settlement amount at the conclusion of the conference. Insurer’s representative satisfies the requirements of this Paragraph if he or she has immediate access to a person who has authority to settle the claim.

(2) A party may move to disqualify a mediator for good cause at any time. The request shall be directed to the Department if the grounds are known prior to the mediation conference. Good cause consists of conflict of interest between a party and the mediator, that the mediator is unable to handle the conference competently, or other reasons that would reasonably be expected to impair the conference. Upon a showing of good cause, the Department will appoint a new mediator pursuant to the procedure set out in Chapter 482-1-135-.06.

(3) On or before the date set for the conference, the insurer shall pay $350 to the Alabama Department of Insurance to defer the Department’s costs which includes the mediator’s fee. If the mediation is cancelled for any reason within 48 hours of the
scheduled mediation time and date, the party canceling the mediation will pay the mediator $175 and the other party will not owe the mediator’s fee. If either party fails to appear at the conference, without good cause as determined by the Department, that party shall pay the other party’s actual expenses incurred in attending the conference, shall pay the mediator’s $350 fee, and the conference shall be rescheduled at a mutually convenient time upon the non-showing party’s payment of an additional mediator’s fee of $350. If
the insurer fails to appear at the conference, without good cause as determined by the Department, the insurer shall pay the insured’s actual expenses incurred in attending the
conference and in any event shall pay the mediator’s fee. Failure of a party to arrive at the mediation conference within 30 minutes of the conference’s starting time shall be considered a failure to appear. Good cause shall consist of severe illness, injury, or other emergency which could not be controlled by the insured or the insurer and, with respect to an insurer, may include the inability to attend due to handling other hurricane-related or tropical storm-related claims and whose non-attendance could not reasonably be remedied prior to the conference by providing a replacement representative or otherwise.

(4) Upon request of the insured or the mediator, a representative or attorney of the Department will be available to help insureds prepare for the mediation conferences. A
representative or attorney of the Department will be present at the conference if requested by a party or the mediator to offer guidance and assistance to the parties. Representatives attending the conference shall not assume an advocacy role but shall be available to provide legal and technical insurance information. Any request for assistance shall be submitted in writing to the Department at least 14 days prior to the scheduled mediation conference.

(5) The mediator will be in charge of the conference and will establish and
describe the procedures to be followed. Mediators shall conduct the conference in accordance with the standards of professional conduct for mediation. Each will be given an opportunity to present their side of the controversy. In so doing, parties may utilize any relevant documents and may bring any individuals with knowledge of the issues, such as adjustors, appraisers or contractors, to address the mediator, with each party bearing their own expenses in providing said documents and individuals. Attorneys are not permitted to attend or participate in a mediation conference held pursuant to this chapter, except for the attorney or representative of the Department. The mediator may meet with the parties separately, encourage meaningful communications and negotiations and otherwise assist the parties to arrive at a settlement. Both parties must negotiate in good
faith. A party will be determined to have not negotiated in good faith if they, or a person participating on their behalf, continuously disrupts or otherwise inhibits the negotiations as determined by the mediator. For purposes of this claims settlement process, mediators shall be deemed agents of the Department and shall have immunity from suit. All statements made and documents produced at a settlement conference shall be deemed settlement negotiations in anticipation of litigation, shall not be public records, and shall not be subject to discovery or admissible in a civil action.

.08 Post Mediation. Within 5 days of the conclusion of the conference the
mediator shall file with the Department a mediator’s status report indicating whether or not the parties reached a settlement. If the parties reached a settlement, the mediator shall include a copy of the settlement agreement with the status report. The insured shall have 3 business days within which he or she may rescind any settlement agreement provided that the insured has not cashed or deposited any check or draft disbursed to him or her for the disputed matters as a result of the conference. In order to rescind the settlement, the insured must return the check or draft to the insurer. Any other rights the insured or insurer may have under the policy or at law shall not be affected by the insured’s decision not to participate in this claims resolution process or by the parties lack of success in resolving the claim under this process.

.09 Insurer Mediation Program. In place of the mediation required by this Chapter, an insurer may submit its own alternative dispute resolution program to the Commissioner for approval. If approved the insurer would not otherwise be subject to this Chapter.

.10 Severability. If a court holds any paragraph or portion of a paragraph of this chapter or the applicability thereof to any person or circumstance invalid, the remainder of the chapter shall not be affected thereby.

.11 Effective Date. This chapter shall become effective ten (10) days from
the date of certification that the properly executed chapter was delivered to the Secretary of State.

Ala. Admin. Code r. 482-1-135.

For the purposes of this title, the following terms shall have the meanings respectively ascribed to them by this section.

(1) INSURANCE. A contract whereby one undertakes to indemnify another or pay or provide a specified amount or benefit upon determinable contingencies.

(2) INSURER. Every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance.

(3) PERSON. An individual, insurer, company, association, organization, Lloyd’s insurer, society, reciprocal insurer or interinsurance exchange, partnership, syndicate, business trust, corporation, and every legal entity.

(4) COMMISSIONER. The Commissioner of Insurance of this state.

(5) DEPARTMENT. The Department of Insurance of this state.

(6) DOMESTIC INSURER. One formed under the laws of this state.

(7) FOREIGN INSURER. One formed under the laws of any jurisdiction other than this state. Except where distinguished by context, “foreign” insurers includes also “alien” insurers.

(8) ALIEN INSURER. One formed under the laws of any country other than the United States of America, its states, district, territories, and commonwealths.

(9) STATE. Such term, when used in context signifying a jurisdiction other than the State of Alabama, means any state, district, territory, commonwealth, or possession of the United States of America.

(10) AUTHORIZED INSURER; UNAUTHORIZED INSURER. An “authorized” insurer is one duly authorized, by a subsisting certificate of authority issued by the commissioner, to transact insurance in this state. An “unauthorized” insurer is one not so authorized.

(11) TRANSACT. Such term, with respect to insurance, includes any of the following:

1. Solicitation and inducement;
2. Preliminary negotiations;
3. Effectuation of a contract of insurance; or
4. Transaction of matters subsequent to effectuation of a contract of insurance and arising out of it.

Ala. Code § 27-1-2 (1975).

No person shall make or issue, or cause to be made or issued, any written or oral statement misrepresenting or making misleading incomplete comparisons as to the terms, conditions, or benefits contained in any policy for the purpose of inducing, or attempting or tending to induce, the policyholder to lapse, forfeit, surrender, retain, exchange, or convert any insurance policy.

Ala. Code § 27-12-6 (1975).

(a) No person shall file with any supervisory or other public official or make, publish, disseminate, circulate, or deliver to any person or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer with intent to deceive.

(b) No person shall make any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report, or who has authority by law to examine into its condition or into any of its affairs or, with like intent, willfully omit to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of such insurer.

(c) Any insurer willfully making a false annual or other statement required of it under this title and individuals knowingly making oath to and subscribing the same shall be punished by a fine of not less than $500.00 nor exceeding $5,000.00.

Ala. Code § 27-12-7 (1975).

(a) No property, casualty, or surety insurer, or any employee thereof, and no broker, agent, or solicitor shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon or any valuable consideration or inducement whatever not specified in the policy except to the extent provided for in rating systems filed with the commissioner by, or on behalf of, the insurer and approved by the commissioner.

(b) No insured named in a policy nor any employee of such insured shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, credit, or reduction of premium.

(c) Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to duly licensed agents, brokers, or solicitors or as prohibiting any insurer from allowing or returning to its participating policyholders, members, or subscribers, dividends, savings, or the unused or unabsorbed portion of premiums and premium deposits.

(d) Nothing in this section or in this title shall be deemed to invalidate any insurance contract, or any amendment of, or agreement as to, such contract or the continuance or renewal of such contract which does not comply with Chapters 12 or 14 of this title or any other provisions of this title, and no insured named in the policy and no officer or employee of such insured shall be deemed to have violated any provision of this title by knowingly receiving or accepting such contract, amendment, agreement, continuance, or renewal, provided, that this subsection shall not be deemed to relieve any authorized insurer or licensed agent, broker, solicitor, or surplus line broker of any forfeiture or penalty otherwise applicable under this title on account of any such violation, nor relieve any person otherwise liable therefor with respect to any tax payable on account of such insurance, nor relieve any insured named in the policy nor any employee of such insured who knowingly receives or accepts any rebate, discount, abatement, credit, or reduction of the premium in violation of subsection (b) of this section, of any penalty otherwise applicable under this title on account of any such violation.

(e) No person in this state shall advertise, offer, or provide free insurance as an inducement to the purchase or sale of real or personal property or of services, directly or indirectly, connected with such real or personal property.

(1) For the purposes of this subsection, “free insurance” is insurance for which no identifiable and additional charge is made to the purchase of such real property or personal property or services or insurance for which an identifiable or additional charge is made in an amount less than the cost of such insurance as to the seller or other person, other than the insurer providing the same.

(2) This subsection does not apply to:

1. Insurance for loss of, or damage to, the real or personal property involved in any such sale or services under a policy covering the interests therein of the seller or vendor;
2. Blanket disability insurance as defined in Section 27-20-4;
3. Credit life insurance or credit disability insurance;
4. Any individual, isolated, nonrecurring, unadvertised transaction not in regular course of business; or
5. Title insurance.

(3) No person shall use the word “free” to describe life or disability insurance in connection with the advertising or offering for sale of any kind of goods, merchandise, or services.

Ala. Code § 27-12-14 (1975).

No insurer shall, without just cause, refuse to pay or settle claims arising under coverages provided by its policies in this state and with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by:

(1) A substantial increase in the number of complaints against the insurer received by the Insurance Department;

(2) A substantial increase in the number of lawsuits against the insurer or its insureds by claimants; and

(3) Other relevant evidence.

Ala. Code § 27-12-24 (1975).

(a) Every policy shall specify:

(1) The names of the parties to the contract;

(2) The subject of the insurance;

(3) The risks insured against;

(4) The time when the insurance thereunder takes effect and the period during which the insurance is to continue;

(5) The premium; and

(6) The conditions pertaining to the insurance.

(b) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included.

(c) This section shall not apply as to surety contracts or to group insurance policies.

Ala. Code § 27-14-11 (1975).

(a) As used in this section, each of the following words shall have the following meanings:

(1) DELIVERED BY ELECTRONIC MEANS or ELECTRONIC DELIVERY. Any of the following:

1. Delivery to an electronic mail address at which a party has consented to receive notices or documents.
2. Posting on an electronic network or site accessible via the Internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice of the posting which shall be provided 1. by electronic mail to the address at which the party has consented to receive notice or 2. by any other delivery method that has been consented to by the party.

(2) PARTY. A recipient of any notice or document required as part of an insurance transaction, including, but not limited to, an applicant, an insured, a policyholder, or an annuity contract holder.

(b) Subject to the requirements of this section, any notice to a party or any other document required under applicable law in an insurance transaction involving property and casualty insurance or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means so long as it meets the requirements of the Uniform Electronic Transactions Act.

(c) Delivery of a notice or document in accordance with this section shall be considered equivalent to any delivery method required under applicable law, including delivery by first class mail, postage prepaid, certified mail, certificate of mail, or certificate of mailing.

(d) A notice or document may be delivered by electronic means by an insurer to a party under this section if:

(1) The party has affirmatively consented to that method of delivery and has not withdrawn the consent.

(2) The party, before giving consent, is provided with a clear and conspicuous statement informing the party of all of the following:

1. The right of the party to withdraw consent to have a notice or document delivered by electronic means, at any time, and any conditions or consequences imposed in the event consent is withdrawn.
2. The types of notices and documents to which the consent of the party would apply.
3. The right of a party to have a notice or document delivered in paper form.
4. The procedures a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update the electronic mail address of the party.

(e)(1) The party, before giving consent, shall be provided with a statement of the hardware and software requirements for access to and retention of a notice or document delivered by electronic means and consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent.

(2) After consent of the party is given, the insurer, if a change in the hardware or software requirements is needed to access or retain a notice or document delivered by electronic means creates a material risk that the party may not be able to access or retain a subsequent notice or document to which the consent applies, shall provide the party with a statement that:

1. Describes the revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means.
2. The right of the party to withdraw consent without the imposition of any condition or consequence that was not disclosed at the time of initial consent.
3. Complies with subdivision (2) of subsection (d).

(f) This section shall not affect the requirements related to content or timing of any notice or document required under applicable law.

(g) If a provision of this section or applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may be delivered by electronic means only if the method used provides for verification or acknowledgment of receipt.

(h) The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subsection (c) of this section.

(i)(1) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective.

(2) A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the insurer.

(3) Failure by an insurer to comply with the notice requirement of this section may be treated, at the election of the party, as a withdrawal of consent for purposes of this section.

(j) This section does not apply to a notice or document delivered by an insurer in an electronic form before September 1, 2015, to a party who, before that date, has consented to receive notices or documents in an electronic form otherwise allowed by law.

(k) If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before September 1, 2015, and pursuant to this section, an insurer intends to deliver additional notices or documents to such party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall meet the following requirements:

(1) Provide the party with a statement that describes:

1. The notices or documents that shall be delivered by electronic means under this section that were not previously delivered electronically.
2. The right of a party to withdraw his or her consent to have notices or documents delivered by electronic means, without the imposition of any condition or consequence that was not disclosed at the time of initial consent.

(2) Comply with subdivision (2) of subsection (c).

(l) An insurer shall deliver a notice or document by any other delivery method permitted by law other than electronic means if:

(1) The insurer attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party.

(2) The insurer becomes aware that the electronic mail address provided by the party is no longer valid.

(m) It is the responsibility of the insurer to deliver to a party any notice or document authorized to be sent electronically pursuant to this section.

(n) This section may not be construed to modify, limit, or supersede the provisions of the federal Electronic Signatures in Global and National Commerce Act, Public Law 106-229, as amended.

Ala. Code § 27-14-19.1 (1975).

An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued or assumed by such insurer, forms for proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for, or with reference to, the completion of such proof or the manner of any such completion or attempted completion.

Ala. Code § 27-14-26 (1975).

Without limitation of any right or defense of an insurer otherwise, none of the following acts by, or on behalf of, an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:

(1) Acknowledgment of the receipt of notice of loss or claim under the policy;

(2) Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted; or

(3) Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.

Ala. Code § 27-14-27 (1975).

No misrepresentation in any proof of loss under any insurance policy shall defeat or void the policy unless such misrepresentation is made with actual intent to deceive as to a matter material to the insured’s rights under the policy.

Ala. Code § 27-14-28 (1975).