Ala. Admin. Code r. 482-1-150-.06

Current through Register Vol. 42, No. 12, September 30, 2024

Section 482-1-150-.06 - Required elements of the Estimated Replacement Cost Method

The Estimated Replacement Cost Method used by an Insurer shall include the following:

(a) A description of the method(s) used by the Insurer to establish the initial Dwelling Coverage Limit or to change the Dwelling Coverage Limit at renewal. At the Insurer's election, the methodology may employ a commercial computer software program such as costing programs offered through (strictly by way of example, not endorsement) Marshall & Swift/Boeckh, Xactware, e2Value, or other third-party providers; an Insurer-developed proprietary computer software program; a property appraisal, inspection, or survey; or any other method or combination of methods used by the Insurer for establishing or changing the Dwelling Coverage Limit.

(b) A process by which the Insurer, at each renewal:

1. shall clearly notify the Dwelling Owner of the change in the Dwelling Coverage Limit, if any;

2. shall clearly notify the Dwelling Owner of its procedures for allowing the Dwelling Owner to request changes to the Dwelling Coverage Limit at any time during the policy term;

3. shall request the Dwelling Owner to provide updated Owner Information if the Dwelling Owner has recently modified, updated, or remodeled the Dwelling or believes the renewal Dwelling Coverage Limit to be inappropriate;

4. shall recalculate, or change at Dwelling Owner's request, the appropriate Dwelling Coverage Limit in the event that the Dwelling Owner provides new Owner Information which would result in a change in the Dwelling Coverage Limit, unless the Insurer has reasonable grounds to believe that the information is not accurate;

5. shall determine by application of its underwriting guidelines whether to modify the Dwelling Coverage Limits accordingly and shall promptly inform the Dwelling Owner of its decision in that regard (the Insurer will be expected to justify its decision rejecting any cost estimate provided by the Dwelling Owner in the event of inquiry by the Dwelling Owner or the Department of Insurance);

6. shall communicate such revised Dwelling Coverage Limit to the Dwelling Owner; and

7. shall subsequently endorse or replace the policy, if required, to reflect the revised Dwelling Coverage Limit.

Ala. Admin. Code r. 482-1-150-.06

New Rule: November 9, 2010; effective November 22, 2010. Filed with LRS November 10, 2010. Rule is not subject to the Alabama Administrative Procedure Act.

Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-12-2.