HB362 Summary

• Amends Section 41-15-4 of the Code of Alabama 1975 to require the risk manager and Finance Director to develop gap coverage and gap plus coverage programs for K-12 public school buildings insured under the State Insurance Fund.

• Gap coverage allows reconstruction of school buildings damaged 80 percent or greater with superior materials and increased square footage, permitting upgrades from lower construction ISO ratings (1-3) to ISO 4 (steel frame with masonry exterior).

• Gap plus coverage provides optional insurance for normally uncovered expenses including new preparation sites, underground utilities, paving, and other costs, limited to a maximum of 10 percent of the destroyed building's insured value.

• Additional premiums for gap and gap plus coverage must be paid annually from the Public School Fund to the Department of Finance, Division of Risk Management, with gap and gap plus coverage mandatory for qualifying K-12 systems.

• The risk manager must draft rules, guidelines, limitations, and coverage endorsements for the program and assess actuarially sound premiums; the act becomes effective on the first day of the third month following passage.