The state legislatures this year have continued to provide the P&C insurance industry with many new mandates. Just as we have seen in prior sessions, states definitely have a focus on consumers. Whether the legislative efforts are directed at claims or underwriting, the message of concern for personal lines insureds is clear.

Policyholder Rights

Alabama took a significant step in the area of consumer clarity with the enactment of HB 166 this year. Effective Jan. 1, 2013, the “Policyholders Bill of Rights” will be made available on the Department of Insurance website, as well as on the sites of each insurance company that writes homeowners insurance in the state. Twelve enumerated standards are stated in the bill, including the policyholder right to:

• Receive a complete policy, and to request a duplicate or replacement policy, if needed.
• 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.
• Cancel their policy and receive a refund of any unearned premium.
• Receive a written notification, at renewal, describing changes in their insurance contract language that are applicable to the renewal period.
• Reject, in the event of a claim, any settlement amount offered by the insurance company.
• Select their licensed contractor or vendor to repair, replace, or rebuild damaged property covered by the insurance policy.
• File a written complaint against any insurance company with the Department of Insurance and to have that complaint reviewed by the Department of Insurance.

This bill further provides for up-front clarity and disclosure with the mandated outline of Coverage and Comprehensive Policy Checklist. These documents are required to be 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.