On April 24, 2025, the Alabama Legislature officially adopted House Joint Resolution 220 (HJR220), formally recognizing the challenges facing commercial property insurance along Alabama’s coastal regions. Originally introduced on April 8, 2025, the resolution addresses the instability and affordability issues impacting an area that contributes over $10 billion annually from tourism and supports nearly 100,000 tourism-related jobs.
HJR220 outlines several strategic measures aimed at stabilizing the coastal commercial insurance market, including:
- State reinsurance initiatives: Exploring programs like catastrophe bonds and risk-sharing agreements to distribute financial risk more broadly.
- Incentivizing risk reduction: Considering tax credits or grants for businesses implementing wind-resistant construction, fortified roofing, flood mitigation measures, and other risk-reduction practices.
- Enhanced oversight and transparency: Recommending that the Alabama Department of Insurance review insurer practices related to rate setting, claim denials, and policy nonrenewals.
- Wind pool coverage expansion: Assessing the possibility of expanding the Alabama Insurance Underwriting Association’s Wind Pool coverage to enhance affordability and claims processing efficiency.
- Post-disaster economic support: Evaluating state-administered contingency funds or loan programs to assist businesses in rapid disaster recovery.
- Strengthened building standards: Encouraging stricter construction standards and resilient zoning policies in high-risk coastal areas.
- Continuing evaluation: Extending the Alabama Coastal Commercial Insurance Joint Interim Study Commission’s mandate to annually review market conditions, propose solutions, and engage stakeholders.
Insurers, businesses, and policymakers operating in coastal Alabama may experience:
- Adjustments to compliance standards related to new construction guidelines.
- Changes in underwriting and claims management practices.
- Enhanced regulatory oversight promotes transparency in insurance operations.
Following its adoption, HJR220 will guide actions taken by the Governor, the Alabama Department of Insurance, and other relevant stakeholders. The Legislature has committed to ongoing research and policy initiatives to protect the economic stability and insurance resilience critical to Alabama’s coastal communities.
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