Alabama § 27-31D-2 - Premium Discount or Insurance Rate Reduction - Fortified Existing Homes.

§ 27-31D-2. Premium Discount or Insurance Rate Reduction - Fortified Existing Homes.

(a) Commencing on May 14, 2009, insurance companies shall provide a premium discount or insurance rate reduction in an amount and manner as established in subsection (g) and pursuant to Section 27-31D-3. In addition, insurance companies may also offer additional adjustments in deductible, other credit rate differentials, or a combination thereof, collectively referred to as adjustments. These adjustments shall be available under the terms specified in this section to any owner who retrofits his or her insurable property located in the State of Alabama to resist loss due to hurricane or other catastrophic windstorm events.

(b) To obtain the adjustment provided in this section, an insurable property shall be retrofitted to any of the following:

(1) The Fortified Home: Hurricane Standards (FHH), or the Fortified Home: Highwind and Hail Standards (FHWH) requirements as may from time to time be adopted by the Institute for Business and Home Safety (IBHS), or a successor entity.

(2) Another mitigation program, or other construction technique, or other standardized code which may be submitted by each insurer and approved by the commissioner.

(3) Zone three HUD code manufactured homes shall also be retrofitted as defined in the Fortified Home-Hurricane: Manufactured/Modular Home Guidelines (FHHM) requirements as may from time to time be adopted by the IBHS.

(c) An insurable property shall be certified as conforming to Fortified Commercial Standard or Fortified Home requirements only after inspection and certification by an IBHS certified inspector.

(d) Certification of conformity of an insurable property with the other mitigation program, other construction technique, or other standardized code shall be made only by a certified or licensed building inspector.

(e) An owner of insurable property claiming an adjustment pursuant to subsection (d) and subdivision (2) of subsection (b) shall maintain certification records and construction records including a certification of compliance with the mitigation program, construction technique, or standardized building code, as applicable, as provided in subdivision (2) of subsection (b), receipts from contractors, receipts for materials, and records from local building officials. The records shall be subject to audit by the commissioner, or his or her representatives, and copies of the records shall be presented to the insurer or potential insurer of a property owner before the adjustment becomes effective for the insurable property.

(f) An owner of insurable property claiming an adjustment pursuant to subsection (c) and subdivision (1) or (3) of subsection (b) shall maintain the IBHS certification documentation, which shall be considered proof of compliance with the FCS or Fortified Home requirements described in subsection (c) and subdivision (1) or (3) of subsection (b). The certification shall be presented to the insurer or potential insurer of a property owner before the adjustment becomes effective for the insurable property.

(g) Insurers required to submit rates and rating plans to the commissioner shall submit actuarially justified rating plans for any person who retrofits an insurable property to comply with the sets of alternatives provided in subsection (b). The adjustment shall only apply to policies that provide wind coverage and may apply to that portion of the premium for wind coverage or to the total premium if the insurer does not separate out its premium for wind coverage in its rate filing. The adjustment shall apply exclusively to the premium designated for the improved insurable property. In addition to the requirements of this section, an insurer may voluntarily offer any other mitigation adjustment that the insurer deems appropriate.