Archives: 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008

In RE:

This proceeding arose upon a request for hearing made by J. Leston & Suzanna Myers of Old Town, ME, to contest the pending nonrenewal of homeowner’s insurance coverage provided to them by York Insurance Company of Maine. On July 24, 2002, the insurer mailed a notice of nonrenewal effective January 11, 2003 on policy number YMSP52434, citing "conditions were discovered on the property that increase the likelihood of claims occurring. Those conditions include: the structure has peeling paint in many areas; the barn which is only attached by a two foot panel attaching the shed ot [sp] the barn has peeling paint, there are several areas where the siding is rotted and falling off, several areas where water appears to be getting in and rotting the siding and sheathing, the one story left side addition has a rotted sill, the barn has a rotted sill, there is a missing pane of glass in the attic window, the attached shed is settling badly on th[sp] outer end and appears to have considerable rotting, there is a front deck that is totally broken and falling apart, the eave trim and soffit have several rotted areas, and one chimney appears to have loose bricks on the top" as the grounds for nonrenewal. Pursuant to 24-A M.R.S.A. §§ 3051 and 3054, York Insurance Company of Maine provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on November 21, 2002 with Connie Mayette sitting as designated hearing officer pursuant to 24-A M.R.S.A. §§ 210 and 3054. The purpose of the hearing was limited to establishing the existence of proof or evidence given by the insurer to support its reason for policy nonrenewal. Staff representing York Insurance Company of Maine appeared at the hearing. Leston and Suzanna Myers represented themselves at the hearing.

Title 24-A, M.R.S.A. § 3051 states that the reason for nonrenewal must be a good faith reason rationally related to the insurability of the property, and § 3054 requires the insurer to establish the proof or evidence of their reason for nonrenewal.

Heather Rosewall, Personal Lines Senior Underwriter, testified that the company is engaged in a re-underwriting process on many accounts, and therefore an inspection was ordered for the property covered by the subject policy. She stated that the inspection shows the property has an increased exposure to weather and wind related losses as well as collapse losses in its current condition, and described the damage and issues depicted in the photos. [EXHIBIT 3] She pointed out damaged or rotted siding, soffits and eaves in photos 2, 3, 5, 7, and 10; the damaged sill in photo 6; and the damaged area of sill and siding where a deck had apparently fallen apart in photo 8. Photo 5 also shows the settling of the attached shed. Ms. Rosewall stated that the insured had been notified of their concerns with the condition of the property in May 2002. [EXHIBIT 5]

Mrs. Myers testified that the water damage on the exterior in the area of the bay window had been due to lack of proper drainage. She stated that a new roof and gutters had been installed around the window. She also stated that Mainely Vinyl, the contractor for the roof, had destroyed the porch (referred to as a front deck in the reason for nonrenewal) so it had been taken down. She stated that, although they hadn’t replaced it yet, they were aware of the issue. She also testified that the missing window pane had been replaced.

Mr. Myers testified that there had always been missing bricks in the chimney, and that his contractor had advised there were no loose bricks. Mrs. Myers added that it was not an issue, as the chimney is not used.

Mrs. Myers testified that they are planning to tear down the attached shed, including the attached mud room, and replace the mud room. She stated that they also are getting estimates to replace the sill and stabilize the main house, and replace the sill in the barn, and that they are investigating possible methods of financing the work. While they are waiting for estimates from other contractors for comparison, the one estimate they have received to address these areas is almost $26,000, she indicated.

Ms. Rosewall indicated that the company was willing to entertain providing coverage on a more limited form, such as a basic dwelling fire instead of the current special form homeowners policy, until the issues could be addressed. The parties were to negotiate that possibility outside of the hearing.

In her closing statement, Mrs. Myers argued that companies are trying to get rid of older properties, which are owned predominantly by the most vulnerable segment of the population. She stated that the company is not attempting to prevent future losses, but just pumping up its profit margin. She said they have only had one claim in 19 years; although they could have put in more claims, they did not.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 3054. York Insurance Company of Maine bears the burden of proof for establishing that the statutory grounds for policy nonrenewal exist. Based on the evidence presented at the hearing, the Superintendent hereby concludes that York Insurance Company of Maine has established adequate grounds for policy nonrenewal.

The policyholders did not dispute a number of the physical conditions cited by the company, and indicated they were aware of the issues and intend to address them when they could. Based on the testimony, however, it was not clear when (or if) all of the necessary work could be accomplished. The insurer has established its reasonable concerns that the property in its deteriorated state is more susceptible to the perils insured against by the policy.

Order and Notice of Appeal Rights

The intended nonrenewal is hereby approved. York Insurance Company of Maine is directed to continue coverage until February 15, 2003, at 12:01 a.m. to allow the policyholders an opportunity to obtain other coverage.

This Decision and Order is a final agency action within the meaning of the Maine Administrative Procedure Act. It is appealable to the Superior Court in the manner provided in Title 24-A M.R.S.A. § 236 and M.R. Civ. P. 80C. Any party to the hearing may initiate an appeal within 30 days after receipt of this notice. Any nonparty whose interests are substantially and directly affected may initiate an appeal within 40 days of the effective date of this Decision and Order.

Return to Cancellation / Nonrenewal Hearing Decisions