After large-scale disasters such as Hurricane Sally or Zeta, you will find that some insurance companies will make initial offers of low-ball settlement and hope that the policyholder takes the payment and does not contest the damage assessment.
Insurance companies have also included language on checks as "full and final payment" or similar languages and when the insured takes out the check, the carrier claims that the insured is excluded from applying for additional amounts for the claim.
Fortunately, Alabama has rules in place to prevent this situation for its policyholders.
Ala. Administration. Coder. 482-1-125-.05 prescribes:
(1) No insurance company shall state for an insured on a draft payment, check or in any attached letter that the payment is "final" or "a release" of any claim other than the insurance limit has been paid or there has been a compromise agreement that the insured and the insurer have agreed on in terms of coverage and amounts to be paid according to the insurance.
(2) No insurer may issue checks or drafts of a partial settlement of a loss or claim under a specific coverage that contains language claiming to release the insurer or its insured from total liability.
If you receive an insurance payment intended to "release" the claim or say it is a "final" payment, know that this is not allowed and you can demand that the operator issue the check again to remove the restrictive language.