Code of Alabama
Ala. Code § 27-12-24 (2026)
Refusal of Insurer to Pay or Settle Claims.
✓ official Alabama Legislature (ALISON) text, current July 2026
No insurer shall, without just cause, refuse to pay or settle claims arising under coverages provided by its policies in this state and with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by:
(1) A substantial increase in the number of complaints against the insurer received by the Insurance Department;
(2) A substantial increase in the number of lawsuits against the insurer or its insureds by claimants; and
(3) Other relevant evidence.
(Acts 1971, No. 407, p. 707, §249.1.)
Notes of Decisions
Cited in 9
cases (1 in the last 5 years), 1989–2021 · leading case: HealthAmerica v. Menton, 551 So. 2d 235 (Ala. 1989).
HealthAmerica v. Menton, 551 So. 2d 235 (Ala. 1989). “, supra, we cannot determine whether this Code section, which is contained in Chapter 12 ("Trade Practices Law") of Title 27 ("Insurance") was relied on by Belasco as a law regulating insurance.”
Gilbert v. Alta Health & Life Ins., 122 F. Supp. 2d 1267 (N.D. Ala. 2000). “§ 1144 (b)(2)(A): “[N]othing in this sub-chapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance .”
Palmore v. First Unum, 841 So. 2d 233 (Ala. 2002). “Code 1975,] § 27-12-24, and as previously existed before its codification, a law which (a) is limited solely to insurers; and (b) constitutes a regulation of the insurance industry under Alabama law?" We initially accepted the certified question.”
Johnny E. Walker v. S. Co. Servs., 279 F.3d 1289 (11th Cir. 2002). “After filing his complaint, Walker sought leave to add the claim that Provident’s unwillingness to disperse benefits violated Alabama Code § 27-12-24, which creates liability for bad faith refusal to pay insurance claims.”
Ceres Env't Servs., Inc. v. Arch Specialty Ins., 853 F. Supp. 2d 859 (D. Minnesota 2012). “The Complaint asserted four claims: commonlaw tort of bad faith (Count 1); violation of Alabama Code § 27-12-24 (Count 2); 2 breach of contract and bad faith under New York law (Count 3); 3 and violation of the Minnesota Consumer Fraud Act, Minn.”
Gilbert v. Alta Health & Life Ins., 276 F.3d 1292 (11th Cir. 2001). “Like the Mississippi law, the Alabama tort of bad faith refusal to pay insurance benefits, codified at Ala.Code § 27-12-24, allows for the award of punitive and/or extracontractual damages if an insurance company knowingly or maliciously refuses to pay a legitimate insurance…”
Tucker v. Transamerica Life Ins. Co. (N.D. Ala. 2021). “Violation of Alabama Code § 27-12-24 In Count Four of her amended complaint, Ms.”
Tiberio P. DeJulio v. State of Georgia, 290 F.3d 1291 (11th Cir. 2001). “" Ala. Code § 27-12-24 (2001). 3 questions of whether Alabama's bad faith law is preempted by ERISA or saved from preemption by the saving clause, and whether Gilbert is a "beneficiary" within the meaning of 29 U.”
Sparks v. Allstate Indem. Co., 62 So. 3d 536 (Ala. Civ. App. 2010). “” The Sparkses asserted claims against Allstate and Rocchio alleging breach of contract, refusal to pay under § 27-12-24, Ala.Code 1975, negligence, and bad faith; they sought both compensatory and punitive damages.”
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