Alabama insurance laws
Insurance regulations, rate filing requirements, department info, and recent bulletins for Alabama. Updated Mar 31, 2026.
Department of Insurance
Alabama operates a mixed rate filing system with prior approval required for personal lines insurance and certain commercial products. The state does not mandate workers' compensation insurance for most employers but maintains robust consumer protections including mandatory uninsured motorist coverage for auto policies. Alabama has modernized its insurance market through recent legislation on surplus lines, data security, and expanded health coverage mandates.
Auto Insurance
Notable Laws
- AL Code § 32-7-6: Mandatory liability insurance with minimum limits of $25,000/$50,000/$25,000
- AL Code § 32-7-23: Mandatory uninsured/underinsured motorist coverage unless rejected in writing
- AL Code § 32-7A-6: Proof of insurance requirement for vehicle registration and operation
- AL Code § 27-23-2 et seq.: Automobile liability insurance cancellation procedures and consumer protections
- AL Admin Code 482-1-125: Trade practices regulation prohibiting unfair cancellation and claims practices
Homeowners Insurance
Notable Laws
- AL Code § 27-40-11: Cancellation notice requirements for property insurance policies
- HB 8 (2024): 90-day advance notice required for cancellation, nonrenewal, or coverage reduction
- AL Admin Code 482-1-127: Credit scoring regulation for homeowners insurance underwriting
- Bulletin 2025-03: Standards for use of aerial imagery in underwriting and claims decisions
- AL Code § 27-22-43: Required disclosure of earthquake and flood exclusions on policy checklist
Recent Bulletins
Filing Requirements for the Group Capital Calculation
Establishes filing requirements for group capital calculation submissions by insurance groups operating in Alabama.
View bulletinUnlawful trade practices - property and automobile insurance-prohibition against certain cancellations, non-renewals, or premium increases
Prohibits property and automobile insurers from cancelling, non-renewing policies or increasing premiums based on natural disasters or certain claims activities. Effective January 1, 2026.
View bulletinFederal Shutdown
Provides guidance to insurers regarding operations and filing procedures during federal government shutdowns.
View bulletinAdoption of SLIP+ for Reporting and Payment of Surplus Line Taxes
Announces the adoption of SLIP+ for States platform for reporting and paying Alabama surplus lines premium taxes.
View bulletinTemporary moratorium on licensing or registration of new captive insurers and risk retention groups in Alabama
Establishes temporary moratorium on new captive insurance licenses pending regulatory review and updates.
View bulletinRecent Law Changes
Nonprofit Health Care Service Corporation Reorganization
Allows nonprofit health care service corporations (such as Blue Cross Blue Shield) to reorganize under the control of a nonprofit holding company, with provisions for asset transfers and regulatory oversight.
Affects health insurers, allowing organizational restructuring while maintaining regulatory protections for policyholders.
Effective: 2026-07-01
Public Education Employee Injury Compensation Program
Establishes workers' compensation coverage for public education employees through PEEHIP, expanding benefits to teachers and education workers previously excluded from coverage.
Education employees gain workers' compensation benefits, affecting thousands of teachers and school staff statewide.
Effective: 2025-10-01
Surplus Lines Insurance Modernization
Updates surplus lines broker laws to align with the Nonadmitted Insurance Model Act, modernizing requirements for unauthorized insurers and multi-state compliance.
Surplus lines brokers and commercial insurers must comply with updated licensing and reporting standards.
Effective: 2024-07-01
Property Insurance Cancellation Notice Requirements
Requires property insurers to provide at least 90 days' written notice before canceling, non-renewing, or restricting coverage, up from the previous 30-60 day requirement.
Homeowners receive extended notice period before policy cancellation, providing more time to secure alternative coverage.
Effective: 2024-09-01
Medical Cannabis Insurance Market Creation
Following medical marijuana legalization, the Department issued guidance allowing insurers to develop commercial coverage products for medical cannabis businesses.
Cannabis businesses can now obtain commercial insurance coverage, expanding the state's insurance market.
Effective: 2023-05-04
Health Insurance
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