Alabama bars non-renewals and surcharges based only on a catastrophe claim — wind pool included
Alabama bars non-renewals and surcharges based only on a catastrophe claim — wind pool included
2026-09-10 · Alabama · Regulation
Alabama's Insurance Commissioner has made it an unlawful trade practice to cancel, non-renew or surcharge a property policy because of a hurricane claim — and the rule expressly reaches commercial policies and the state's wind pool. For a coastal condominium association, that is the master policy.
Revised Bulletin 2025-08 was issued by Commissioner Mark Fowler on February 4, 2026, effective immediately, addressed to all property and casualty insurers admitted in Alabama.1 It replaces Bulletin 2010-10 and an earlier version of Bulletin 2025-08 issued December 15, 2025 — the revision, the bulletin says, was made “to change certain dates in response to feedback from insurers.”
Who it applies to
The scope paragraph is unusually broad, and the last clause is the one that matters on the coast:
“This Bulletin applies to all personal and commercial property and automobile insurance policies issued by insurance companies authorized to write property and casualty insurance in Alabama and by the Alabama Insurance Underwriting Association.”
Certain actions, the bulletin states, “are deemed unlawful trade practices for purposes of the Trade Practices Law, Ala. Code §§ 27-12-1 et seq.”
What is prohibited, and from when
Effective January 1, 2026 — an insurer “shall not cancel or non-renew a personal or commercial property insurance policy or automobile insurance policy if based solely on a claim arising from a catastrophe, natural disaster, acts of nature, weather-related causes, or based solely on a loss arising from an event not affecting the line of business in which the policy is placed.”
Effective for new policies written on or after March 15, 2026, and for renewals on or after May 15, 2026 — on the same “based solely on” trigger, an insurer shall not:
“(a) Apply a premium surcharge to such policy; or (b) Offer to place the coverage in another rating tier with the same insurer or place the coverage through an affiliated insurer if either such action would result in a higher premium.”
Subparagraph (b) closes the obvious workaround: moving the risk to a costlier tier or an affiliate instead of surcharging it.
A compliance deadline sat behind these: “By February 15, 2026, each insurer that has rating rules which do not comply with this Bulletin must file an amendment to its rating manual through SERFF and provide a complete updated manual in the filing.”
What is still allowed
The bulletin sets out two carve-outs, and both matter to an association reading a non-renewal notice.
Other substantial reasons. Nothing prohibits cancelling or non-renewing after a catastrophe claim “if there are additional substantial reasons for such action such as concealment, misrepresentation, or fraud by the insured relating to the policy, whether before or after the claim.” The operative word throughout the prohibition is “solely”: a carrier that can point to a genuine additional ground is outside the rule.
Claims-free discounts. An insurer may remove or discontinue a claims-free discount after a catastrophe claim. The bulletin adds a bracketed note: it “is still prohibited to remove or discontinue a claims-free discount based solely on a loss arising from an event not affecting the line of business in which the policy is placed.”
What it changes for boards and managers
The practical value of this bulletin to an Alabama association is that it converts a market grievance into a regulatory complaint with a named legal hook.
A master policy is a commercial property policy. The bulletin says “personal and commercial” four times. An association whose master policy is non-renewed after a named-storm claim, with no other stated reason, is describing conduct the Commissioner has deemed an unlawful trade practice under Ala. Code §§ 27-12-1 et seq.
The wind pool is inside the rule. The Alabama Insurance Underwriting Association is named expressly. That is not obvious — residual markets are frequently carved out of market-conduct directives — and it matters in Baldwin and Mobile counties, where the Beach Pool is the backstop.
Read the stated reason on the notice, closely. Everything turns on “based solely on.” If a non-renewal notice cites the claim and nothing else, the bulletin is squarely engaged. If it cites the claim plus roof condition, plus an inspection finding, plus a deferred-maintenance item, the analysis is different and the carrier will say so.
The dates are staged, and boards renewing now are past all three. Cancellations and non-renewals: January 1, 2026. New-business surcharges: March 15, 2026. Renewal surcharges: May 15, 2026. Every Alabama association renewing a master policy today is inside the full rule.
Questions go to the Department's Rate & Forms Division at [email protected], per the bulletin itself.
The companion rule on drone and satellite photos
One other ALDOI bulletin in the same window bears directly on association roofs. Bulletin 2025-03, issued June 17, 2025, addresses the use of aerial imagery — “photographs, videos, or other visual data captured using satellites, aircraft, drones, or other aerial platforms” — and states expressly that “[t]he following applies to consumer and commercial risks.”
Its directives: aerial imagery “should not be the only information utilized in decision-making” where possible, and blurry or older images showing shingle staining “will usually not be sufficient, standing alone, to prove that a roof must be replaced.” The burden allocation is stated outright — “The burden is on the insurer to prove the reason for non-renewal,” and “[o]lder aerial imagery standing alone may not be sufficient to meet this burden.”
And a disclosure right that an association can use: “If an affected property owner files a complaint with the Alabama Department of Insurance, that complainant will be entitled to view evidence relied upon by the insurer.”
A numbering caution
The Department's online bulletin index lists each bulletin's subject in a column that reads one row out of step with the bulletin numbers beside it, which has already produced published references to a “Bulletin 2026-01” for this measure. The correct citation is Revised Bulletin 2025-08, dated February 4, 2026; we confirmed it against the signed bulletin itself, which carries that number, that date and Commissioner Fowler's signature. The aerial-imagery bulletin is likewise 2025-03, dated June 17, 2025, not 2025-04.
What to watch next
The bulletin is a market-conduct directive, not a rate rule: it constrains why a carrier may act, not what it may charge at renewal on ordinary underwriting grounds. Whether it slows coastal non-renewals in practice will show up in Baldwin and Mobile county renewals over the next two seasons rather than in any published filing.
We found no ALDOI enforcement action under the bulletin as of this writing, and no publicly noticed rate filing or rate hearing for the Alabama Insurance Underwriting Association in the period — AIUA rates reach the Department through SERFF, which is not a public docket.
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