Alabama DOI Expands Policy Cancellation, Nonrenewal Prohibitions

Property insurers in Alabama will no longer be able to cancel or non-renew policies because of natural disasters or because of losses that don’t affect that line of business, the Alabama Department of Insurance announced in a recent bulletin.

Personal and commercial property insurance carriers, along with automobile insurers admitted in the state, for new policies after Feb. 1, 2026, and for renewals after April 1, also shall not raise premiums or add a surcharge due to claims from disasters, weather events or losses outside the line of business.

The DOI did not give an example of such losses, nor did it explain what may have prompted the change to existing regulations. Officials there could not be reached for comment, and insurance industry representatives reached Tuesday were left wondering.

The rule does not prohibit carriers from cancelling or non-renewing policies because of misrepresentation or fraud by the insured, nor from discontinuing a claims-free discount after a claim has been filed.

The DOI also said that carriers that have rating rules that do not comply with the new regulation should file an amendment to their rating manuals through the System for Electronic Rate and Form Filing, known as SERFF.

Questions can be emailed to rates.forms@insurance.alabama.gov.