Alabama’s Baldwin County Backs Captive as Coastal Insurance Option

County commissioners in Alabama’s Baldwin County have voted to endorse the concept of “captive insurance” in the hopes of helping the struggling construction industry on Alabama’s Gulf Coast.

Following the devastating hurricane seasons of 2004 and 2005, insurance costs shot up and coverage dwindled on the coast.

State legislators authorized captive insurance programs to address the crisis and earlier this year added homes to the types of property they could cover.

The term captive comes from limiting the insurance to a certain geographic area or category of policy holder.

A captive program could be formed by counties and cities through a capital improvement district, which could get tax breaks and issue bonds to provide capital. A board appointed by the governments involved would oversee the program.