Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-125 - STANDARDS FOR PROPERTY/CASUALTY INSURANCE CLAIMS
Section 482-1-125-.08 - Standards For Prompt, Fair And Equitable Settlements Applicable To Automobile Insurance
Current through Register Vol. 43, No. 02, November 27, 2024
(1) When the insurance policy provides for the adjustment and settlement of first party automobile total losses on the basis of actual cash value or replacement with another of like kind and quality, one of the following methods shall apply:
(2) Where liability and damages are reasonably clear, insurers shall not recommend that third party claimants make claim under their own policies solely to avoid paying claims under such insurer's policy.
(3) Insurers shall not require a claimant to travel an unreasonable distance either to inspect a replacement automobile, to obtain a repair estimate or to have the automobile repaired at a specific repair shop. Insurers may require repair estimates to be obtained in the area where the accident occurred.
(4) If partial losses are settled on the basis of a written estimate prepared by or for the insurer, the insurer shall supply the insured a copy of the estimate upon which the settlement is based. The estimate prepared by or for the insurer shall be reasonable, in accordance with applicable policy provisions, and of an amount which will allow for repairs to be made in a workmanlike manner.
(5) When the amount claimed is reduced because of betterment or depreciation all information supporting such reduction shall be contained in the claim file. Such deductions shall be itemized and specified as to dollar amount.
(6) When the insurer elects to repair and designates a specific repair shop for automobile repairs, the insurer shall cause the damaged automobile to be restored as nearly as possible to its condition prior to the loss at no additional cost to the first party claimant other than as stated in the policy and shall make reasonable efforts to assure repairs are completed within a reasonable period of time. Giving the insured names of repair shops in response to a request from the insured shall not constitute designating a specific repair shop. This Paragraph is not intended to and does not create a duty on the insurer to pay for any alleged diminution in value of the automobile.
(7) The insurer shall provide reasonable notice to an insured prior to termination of payment for automobile storage charges and documentation of the denial as required by Rule 482-1-125-.04. Such insurer shall provide reasonable time for the insured to remove the vehicle from storage prior to the termination of payment.
(8)
(9) An insurer's proposed use of replacement crash parts shall comply with Section 32-17A-1, et seq., Code of Ala. 1975.
(10) No insurer shall deny or fail to adjust an otherwise valid third-party claim because of the failure of the insured to cooperate unless the insurer proves the lack of cooperation is material, substantial, and to the prejudice of the insurer.
Author: Commissioner of Insurance
Statutory Authority: Code of Ala. 1975, §§ 27-2-17, 27-1-17, 27-1-19, 27-12-21, 27-12-24, 27-14-8, 27-14-11, 27-14-9.