Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-093 - CREDIT PROPERTY AND INVOLUNTARY UNEMPLOYMENT INSURANCE
Section 482-1-093-.06 - Consumer Rights

(a) The consumer shall not be required or coerced to obtain insurance from any particular insurer nor through any particular producer or representative of a company as a condition to obtaining a loan. No insurer shall participate or knowingly allow its producers to participate in such a scheme of requirements or coercion.

(b) If the debtor has or obtains additional personal property coverage, the debtor may retain additional coverage or may substitute coverage at any time, and upon such substitution, shall be entitled to a refund of the unearned premium on the policy. Where such insurance was not initially required by the creditor, the debtor may cancel, at any time, without substituting and shall be entitled to a refund of any premium paid. If such substitution or cancellation occurs within thirty (30) days of the extension of credit, the entire premium shall be refunded.

(c) Any insurance written to secure an underlying loan must be canceled upon the satisfaction or termination of that underlying loan and a pro-rata refund of unearned premium made to the insured. Debtor requested cancellation more than thirty (30) days after extension of credit will result in return premium of 90% of pro-rata return premium. No refunds of less than $1.00 are required.

Author: Vincent R. Ledlow, Associate Counsel