SB326 Summary

• All homeowners insurance providers in Alabama must cover catastrophic ground cover collapse (abrupt ground collapse causing structural damage and government condemnation) in every homeowners policy at no additional cost.

• Insurers must offer optional sinkhole loss coverage for an additional premium with deductibles of 1%, 2%, 5%, or 10% of dwelling limits; policyholders must be notified in bold 14-point type if sinkhole coverage is excluded.

• Upon receiving a sinkhole claim, insurers must inspect the property and engage a licensed professional engineer or geologist to conduct testing and issue a report determining whether sinkhole activity caused the damage.

• If sinkhole loss is verified, the insurer must pay for land stabilization and foundation repairs within 12 months per the engineer's recommendations; policyholders must enter repair contracts within 90 days of coverage confirmation.

• Insurers must file reports with county clerks and policyholders must file reports with probate judges; property sellers must disclose prior sinkhole claims and payment amounts to buyers before closing; act effective October 1, 2024.