Alabama Legislature targets coastal commercial insurance stability with adoption of HJR220

On April 24, 2025, the Alabama Legislature formally adopted House Joint Resolution 220 (HJR220), emphasizing the critical need to address the growing instability and affordability challenges in commercial property insurance along Alabama’s coastal regions. Initially introduced on April 8, 2025, the resolution acknowledges the significant economic impact of coastal areas, including over $10 billion annually from tourism and nearly 100,000 tourism-related jobs. 

The resolution outlines multiple strategies to stabilize the coastal commercial insurance market: 

• State reinsurance initiatives: Exploring state-supported reinsurance or risk pooling programs, including mechanisms like catastrophe bonds and risk-sharing agreements, to distribute financial risk more broadly. 
• Incentivizing risk reduction: Considering targeted tax credits or grants for businesses that implement wind-resistant construction, fortified roofing, flood mitigation insurance, and other risk-reduction practices. 
• Enhanced oversight and transparency: Recommending the Alabama Department of Insurance review insurer practices regarding rate setting, claim denials, and policy nonrenewals. 
• Wind pool coverage expansion: Assessing the potential to broaden the Alabama Insurance Underwriting Association's Wind Pool coverage to improve affordability and claims processing efficiency. 
• Post-disaster economic support: Evaluating state-administered contingency funds or loan programs to assist businesses in rapid recovery after disasters. 
• 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 in coastal Alabama may face: 

• Adjustments to compliance standards related to new construction guidelines. 
• Changes in underwriting and claims management practices. 
• Enhanced regulatory oversight promoting transparency in insurance operations. 

Following its adoption, HJR220 will guide further actions by the Governor, Alabama Department of Insurance, and relevant stakeholders. The Legislature expressed a strong commitment to ongoing research and policy development aimed at safeguarding the economic and insurance stability vital to Alabama’s coastal communities.