Alabama Insurance Pool Grows As Private Market Shrinks

More Alabama homeowners are seeking their insurance coverage through the state’s windpool as the trend of private insurers shedding their wind policies continues.

The Alabama Insurance Underwriting Association, known as the windpool, grew by a third between February 2010 and February 2011 with its total policy count rising from 15,214 policies to 20,350 policies.

Bob Groves, manager of the windpool, said the increase is due to a number of insurers dropping their policies along the state’s coastline and inland areas. Northbrook, Illinois-based Allstate Insurance completed its plan to non-renew some 3,000 policies in March. Also, Montgomery, Alabama-based Alfa Mutual Insurance has dropped some 5,000 policies this month.

Farmers Insurance says it will cut 10,400 policies by July.

Typically, a minority of the dropped by private insurers end up in the pool because many property owners drop wind coverage altogether.

Alabama Governor Robert Bentley is creating a commission to address the rising cost of insurance for the state’s coastal homeowners and said he plans on calling a special session of the Legislature to deal with the issue.