Frequently Asked Questions
Q. Can consumers apply for coverage with AIUA directly?
A. No. To apply for coverage with AIUA, consumers must contact a licensed agent.
Q. What are the requirements for an agent to write business with AIUA?
A. No contractual relationship is necessary. AIUA will conduct business with any resident agent who has a license for the sale and distribution of property & casualty insurance issued by the Alabama Dept of Insurance. Agents MUST submit a completed new agent application and W-9 form along with a copy of their agent license to AIUA with their first submission of new business. Non-resident agents in all states except
Q. Where can a new agent application and W-9 form be found? W9 Form
A. This form can be found on our website under AGENT INFORMATION. All agents must print this form, complete & submit to AIUA (along with their agent license number) prior to conducting business with AIUA.
Q. When Is the Notice 1 (07-2007)", "Out of Pocket, Flood Damage Notice" Form required?
A. Notice 1 is required for all applications, residential and commercial, new and renewals.
Q. Does an agent have binding authority?
A. No. An agent does not have any authority to bind coverage on behalf of the Association under any circumstances.
Q. Does AIUA accept applicant/Insured’s check for premium?
A. No. Premium payments must be submitted to AIUA by agency check, money order, or certified check. Note: AIUA does accept applicant’s check for the non-refundable application processing fee.
Q. Does AIUA offer financing?
A. No. The full premium (less commission), along with all other required documents, must be received in the Associations office prior to coverage going into effect. All policies will be issued for a term of one (1) year.
Q. What is NET premium?
A. Net premium is gross premium less agent’s commission.
Q. What are the AIUA Underwriting Requirements for DP-2 Replacement Cost Coverage on older homes?
A. Buildings more than 25 years of age will require written documentation that the electrical wiring, heating system, plumbing and roof has been updated within the last 20 years.
Q. What does “written documentation” mean? If the work was done very long ago, the documentation may not be readily available.
A. “Written Documentation” means copies of itemized, paid receipts from licensed contractors specifying the nature/extent of upgrades/replacements. Insured/Agent statement alone is not satisfactory. Our intent is to limit the replacement cost coverage to owner-occupied homes under 25 years of age. Older homes that have been renovated to the extent we expect for our program will have no problem producing the documentation. Those older homes that cannot produce the documentation are not eligible for replacement cost coverage.
Q. Does AIUA cover vacant property?
A. No.
Q. Does AIUA cover farm property?
A. No.
Q. When can coverage become effective?
A. Coverage becomes effective at 12:01am CST on the 16th calendar date following AIUA’s receipt of the complete application packet which includes all of the following: properly completed application, application processing fee (non-refundable), full net premium, photos [front & rear, color, & at least 3 x 5], a fully completed replacement cost calculation and/or a recent real estate appraisal of current value, and a properly completed NOTICE 1(07-2007) form.
Q. Can coverage be requested to take effect on a date that falls after the 16 day waiting period?
A. Yes, a future effective date.
Q. Can an effective date be obtained without having to wait 16 days?
A. Yes, ONLY for a qualifying originating mortgage closing. A mortgage closing binder form must be completed & faxed to AIUA prior to the submission of the rest of the application packet.
Q. Are there restrictions for the mortgage binder procedure?
A. Yes. It must be an originating mortgage - a transfer of ownership from a seller to a buyer (the applicant). The mortgage must be in an amount of at least 50% of the value of the structure and for a term of at least 10 years.
Q. What transactions are NOT considered an originating mortgage?
A. line of credit, second mortgage, refinance, construction loans, credit card with equity line of credit, any type of personal loan, 30 day notes, 60-day notes or similar instruments, or any financial arrangement that does not meet the Association's definition of originating mortgage.
Q. What is the procedure for obtaining a mortgage closing binder?
A. The agent must print the mortgage closing binder form from our website, complete, & fax to AIUA. We will review, assign a binder number, authorize, & fax back to the agent. The binder effective date will be the date of the closing unless we receive the binder form the day of the closing, in which case the binder will become effective the following day. The binder expires in 10 business days following the effective date. AIUA MUST receive the complete application packet (completed app, non-refundable app fee, photos, value computation, & full net premium) along with a copy of the binder form and a copy of the signed Department of Housing & Urban Development Settlement Statement. If all required documents are not received by the binder expiration date, the binder is null and void and the 16 day waiting period will apply to the submission.
Q. Can the photos be emailed to AIUA?
A. Yes, email photos to
Q. How can the territory of a property be determined?
A. Go to the MAPS section on the AIUA website & enter the property address.
Q. Are there any restrictions on mobile homes?
A. Mobile homes must be at least 8’ x 32’ in size, tie-downs installed, and proof of the Alabama Manufactured Housing Commission Installation Certification Label must be provided.
Q. Exactly which properties are considered GULF FRONT?
A. All properties with a
Q. Is there a minimum earned premium?
A. Yes. $100 minimum earned premium for both residential & commercial.
Q. How is return premium calculated for cancellations?
A. Return premium for Residential is computed on a pro-rata basis. Commercial policies are cancelled pro-rata if the property is sold, if AIUA cancels the coverage or if the policy is cancelled and rewritten to change policy inception dates. Commercial policies are cancelled short rate (90% pro-rata) for any other reason.
Q. Can a policy ever be cancelled on a flat rate basis?
A. An agent can request flat rate cancellation of a policy within 45 days of the policy inception date for non-payment of premium.
Q. How far back can a cancellation be backdated?
A. AIUA will go back no more than 10 days from the date requesting change or cancellation of coverage except if the property is sold and verification of sale and release of lien(s) is/are provided.
Q. When will an endorsement for new coverage or increase in limits go into effect?
A. It will go into effect 12:01 CST on the 16th calendar day following the Associations receipt of change request and premium due or on such later date set by the insured to conform with the reason of change.
Q. Who should be contacted in the event of a loss?
A. The Insured must contact their servicing agent to submit a claim. The servicing agent will in turn submit a completed property loss notice to AIUA claims department.
Q. Who should an Applicant/Insured contact with questions about an AIUA policy?
A. Applicants/Insured’s should contact their servicing agent who should be able to assist them with any questions they may have concerning their AIUA policy.
Q. Does AIUA offer liability coverage?
A. No
Q. Does AIUA offer Loss Assessment or Loss of Use coverage?
A. No
Q. Does AIUA offer Loss of Rents?
A. Yes. AIUA policies include limited Loss of Rents coverage. This coverage is outlined in the policy form under the section titled Other Coverages, Rental Value.
Q. Does the Association automatically renew policies?
A. No. Continuation of coverage generally will be in accordance with the rules and underwriting standards regulating submissions and issuance of new policies. A renewal application is sent to the insured and agent as advanced notice of expiration. To renew a policy, the fully completed renewal application, properly completed Notice 1 (07-2007) form, renewal fee, & full net premium must be submitted to AIUA to prior to the expiration of the current policy.
NOTE: Occupancy status, flood insurance information, and supplemental fire insurance information for wind only policies MUST be indicated on the renewal application, as this information is required each year.
Q. Does AIUA offer a grace period?
A. No.
Q. Who bills the mortgage company?
A. It is the agent’s responsibility to bill the mortgage company if the premium is escrowed.
Q. What are the requirements for flood coverage on condominiums?
A. Flood coverage is required in an amount at least equal to the AIUA policy limits or the maximum provided by the National Flood Insurance Program for those properties located in flood hazard zones, A or V. Flood Insurance is NOT a prerequisite on contents located above the second level of any multi-level building.
*NOTE: Flood coverage (NFIP or Federally sponsored) is required for all property located in CBRA Zone regardless of flood hazard zone.
Q. Is flood coverage required for condominiums if the condo association has flood coverage for the entire building?
A. Yes. The condo association only covers the exterior walls, therefore, flood coverage is required for the inside walls and contents unless the condo unit is located above the second level of any multi-level building.
Q. Is property located in areas protected by Coastal barrier Resources Act (CBRA) eligible for coverage with AIUA?
A. Yes, if the property is located in areas designated under the Coastal Barrier Resources Act a flood insurance policy issued by the National Flood Insurance Program (or a federally sponsored Write Your Own (WYO) program) in an amount at least equal to the AIUA policy limits or the maximum provided by the National Flood Insurance Program is required.