Coastal Wind Pool

A coastal wind pool is a state-created program that sells windstorm and hail coverage to property owners near the coast who cannot buy it in the standard market. It is often called a beach plan or a residual market, because it exists as the insurer of last resort for wind risk. Standard homeowners policies on the coast frequently exclude windstorm, so the wind pool is where that separate wind coverage comes from.

How does a coastal wind pool work?

In high-hurricane-risk coastal areas, many standard insurers will not cover wind damage, so they write a homeowners policy that excludes windstorm. To fill that gap, a number of coastal states run a wind pool that homeowners can buy a separate windstorm policy from. Coverage is usually limited to wind and hail, so an owner still needs a homeowners policy for fire, theft, and liability, and a separate flood policy for rising water. Wind-pool policies commonly carry higher, percentage-based deductibles for named storms; see named-storm deductible.

What is Alabama’s coastal wind pool?

Alabama’s wind pool is the Alabama Insurance Underwriting Association (AIUA). On much of the Alabama coast (Mobile and Baldwin counties), a homeowners policy excludes wind, and the windstorm coverage is written through AIUA or a private wind carrier. So a Gulf Shores homeowner can end up with three separate policies: a homeowners policy, an AIUA wind policy, and an NFIP flood policy. A coverage review can map which of the three a specific coastal home has and where the gaps are.

Sources

Code of Alabama Section 27-1-24 (AIUA mandatory insurer membership and coverage area).