By George Altman @ AL.com
MONTGOMERY, Ala. — Coastal Alabama homeowners who suspect that insurance companies are charging them more than upstate residents for coverage unrelated to hurricanes could find out for sure under a proposal in the Legislature.
The bill, filed by Sen. Ben Brooks, R-Mobile, would require insurers to include a breakdown of coverage costs in renewal paperwork sent to Alabama policyholders every year.
The disclosure would show how much of a person’s premium goes to wind, fire, theft and other types of coverage.
Brooks said he wrote the bill to address concerns expressed by residents of Mobile and Baldwin counties — and confirmed by the Alabama Department of Insurance — that the coastal counties were being asked to pay more than the rest of the state for non-wind coverage.
“This doesn’t cost the insurance companies anything. This doesn’t change their rates,” he said. “All this is, is a way for the average citizen, the layperson, to check his rates against others in the state.”
Spokesmen for Alfa Mutual Insurance, Allstate Corp. and State Farm Mutual Automobile Insurance Co., Alabama’s three largest insurers, all said they hadn’t had enough time to study the measure and couldn’t comment on it.
Still, State Farm’s David Majors said his company should be able to isolate the costs associated with wind coverage, since it already does so for some policies.
“State Farm knows the amount of wind coverage on a policy in Mobile and Baldwin County because when we remove wind coverage, we know the amount to reduce the policy by,” Majors said.
Since Hurricane Ivan struck in 2004, the availability of private insurance along Alabama’s coast has steadily shrunk, while costs for wind coverage have skyrocketed.
But beyond paying more to cover the high winds that a hurricane might bring, policyholders in Mobile and Baldwin have seen higher costs for other types of insurance, state Insurance Commissioner Jim Ridling told the Press-Register in an April 2009 article. Ridling said there was no clear evidence that fire or theft losses were higher in the coastal counties than the rest of the state.
