What Is the Alabama Insurance Underwriting Association?

The Alabama Insurance Underwriting Association, known as AIUA, is the state’s insurer of last resort for wind, hail, and hurricane coverage on property in the coastal portions of Baldwin and Mobile counties. If private carriers have turned you down, AIUA is likely where your coverage will come from. It has operated as the Gulf Coast’s safety net for more than 40 years and was codified by the Alabama legislature in 2008.¹

Who Can Get an AIUA Policy

Two things have to be true. Your property must sit south of the 31st parallel in Baldwin or Mobile County, which covers the coastal and near-coastal portions of those counties. And you must be unable to find coverage in the private market.² Property north of that line falls outside AIUA’s territory entirely.

You can’t apply directly. Every application has to run through an AIUA Authorized Agent, a licensed insurance professional who confirms you don’t qualify for a standard private policy before submitting your paperwork.² This gatekeeping is deliberate. AIUA is a backstop, not a cheaper alternative.

One point that catches people out: policies do not automatically renew. When your term ends, continuation goes through the same underwriting rules as a new application.³ If the property has developed code or condition issues since your last policy, those issues will be rechecked at renewal.

What AIUA Covers and What It Doesn’t

The core product is wind, hail, and hurricane coverage. That’s the peril Gulf Coast private insurers most want to avoid, and it’s what most AIUA policyholders carry.⁴ Buying a wind-only policy means you have to show proof of fire and extended coverage from another insurer.

Fire coverage through AIUA itself is very limited. Since January 1, 2017, AIUA only issues fire and extended coverage to properties that were continuously insured under an AIUA fire policy both before and after that date.⁵ New applicants cannot get fire coverage through AIUA.

Several common coverages are not available at all: theft, liability, flood, loss assessment, business interruption, and blanket insurance across multiple buildings.⁴ Expect to pair your AIUA policy with a homeowners policy from a private insurer and a separate flood policy through the National Flood Insurance Program or a private flood carrier.

Property That Can’t Be Insured

AIUA publishes a direct list of ineligible property. If yours falls into any of these categories, no application will succeed:

Vacant structures with no occupant.
Property owned by any local, county, state, or federal government entity.
Farm property.
Any building started on or after January 1, 1971, that was not built in substantial compliance with the Southern Standard Building Code, including its wind-design requirements.
Property in Special Flood Hazard Zone A or V without flood insurance at least equal to the AIUA policy limits or the maximum available through NFIP.
Property in a designated Coastal Barrier Resources Act area without the same flood coverage.
Wind-only applicants without proof of fire and extended coverage from another insurer.
Mobile and manufactured homes used for commercial purposes.
Any structure located in whole or in part in or over water.

The post-1970 code requirement is the one that trips up the most applicants. Older homes significantly modified or rebuilt since January 1, 1971, may need to demonstrate code compliance for the renovated portions before AIUA will write the policy.³ AIUA can also require a property inspection, and if deficiencies turn up, repairs may need to come first.

Limits, Valuation, and Deductibles

The maximum dwelling limit on any single residential building is $500,000. Personal property coverage caps at $250,000 per dwelling.⁴ Commercial properties qualify for AIUA’s commercial wind-only policy, written on an actual cash value basis rather than replacement cost.²

Dwellings must be insured at 100% of value, as determined by a current Marshall, Swift & Boeckh replacement cost computation your agent runs during the application.² When a property’s total insurable value exceeds the $500,000 cap, AIUA waives co-insurance and uses a First Loss Scale Formula, adjusting the rate based on the ratio of your limit to the property’s full value.³

Mobile homes are not eligible for replacement cost coverage. They can only be written on actual cash value, which pays based on depreciated value rather than rebuild cost.² For an older mobile home, that gap can be substantial.

Hurricane deductibles are percentage-based, not flat dollar amounts. Your options are 1%, 2%, 5%, or 10% of the insured value of the property. A lower percentage brings a higher premium; a 10% deductible lowers the premium but leaves you absorbing a much larger share of any loss. On a $400,000 policy, a 2% deductible means the first $8,000 of a covered hurricane loss comes out of your pocket.

Premiums have to be paid in full before coverage begins. AIUA does not offer installment plans. Payment can go through by check, money order, major credit card, or ACH transfer.⁶ The minimum premium is $100.³ Rates are developed by independent actuaries factoring in average annual losses, modeled probable maximum losses from catastrophic events, operating expenses, and reinsurance costs, then filed with the Alabama Department of Insurance for approval before taking effect.¹

Discounts for FORTIFIED Homes

AIUA offers premium discounts on residential dwelling policies for homes built or retrofitted to the IBHS FORTIFIED wind-resistive construction standards. Qualifying requires an inspection and certification from IBHS confirming the home meets either the FORTIFIED for Safer Living new construction standards or the FORTIFIED Existing Homes Program retrofit standards.⁷ Certification has to stay current, and the discount amount depends on the FORTIFIED level. Individual wind-resistant features such as impact-resistant shingles, hurricane straps, or window protection can sometimes earn partial discounts as well.⁸ In the highest-risk coastal zones, a retrofit’s cost can pay for itself in premium savings within a few years.

How to File a Claim

Report damage to AIUA as soon as possible after a covered wind or hurricane event. Make temporary repairs to prevent further damage, photograph everything, and keep all damaged property until an adjuster inspects it.⁹ Claims can be initiated through AIUA’s website with a description of the damage and an estimated loss amount.¹⁰

You then have 60 days from the loss to furnish a formal proof of loss, a detailed written statement itemizing the damages. This is a policy requirement, not a guideline.¹¹ Don’t mistake the initial online claim report for the proof of loss. The online form starts the process; the proof of loss is the detailed sworn statement that must land within 60 days. An independent adjuster will inspect the property, and if their findings diverge from your estimate, AIUA may ask for additional documentation or a follow-up evaluation before paying.

If You’re Denied or Disagree With a Decision

Application denials come with written notice of your right to appeal, and AIUA’s rules provide an appeal process for claim and underwriting disputes.³ Start there with a written appeal and supporting documentation.

If direct resolution fails, the next step is a complaint with the Alabama Department of Insurance. ALDOI asks that you attempt to resolve the matter with the insurer first, then submit a formal complaint through their online form or a downloadable PDF, including your policy number, any claim number, and a detailed account of your concerns.¹² ALDOI can investigate and take corrective action if AIUA is found out of compliance with Alabama insurance regulations. Litigation remains an option, though Alabama courts generally expect policyholders to exhaust these administrative routes first.

1
Alabama Insurance Underwriting Association. About the Alabama Insurance Underwriting Association
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Alabama Insurance Underwriting Association. FAQs
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Alabama Insurance Underwriting Association. AIUA Rules and Procedures for Submitting Applications
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Alabama Insurance Underwriting Association. AIUA Rules and Procedures for Submitting Applications
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Alabama Insurance Underwriting Association. AIUA Plan of Operation
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Alabama Insurance Underwriting Association. Alabama Insurance Underwriting Association
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Alabama Insurance Underwriting Association. Wind Mitigation Discounts
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FORTIFIED Home. FORTIFIED Home
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Alabama Insurance Underwriting Association. Claims Information
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Alabama Insurance Underwriting Association. Alabama Insurance Underwriting Association – Claim Form
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Alabama Insurance Underwriting Association. Dwelling Policy Program Manual
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Alabama Department of Insurance. ALDOI – File A Complaint