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This proceeding arose upon a request for hearing made by Peter & Joanne Ahearn of Randolph, ME, to contest the pending nonrenewal of homeowners insurance coverage provided by MMG Insurance Company. On October 16, 2002, the insurer mailed a notice of nonrenewal effective November 27, 2002 on policy number HO 0194205, citing “due to deteriorating condition of the dwelling which includes collapsing porch, roofing on porch is worn and lifting, rotting wood steps and trim, peeling paint and lifting shingles on main dwelling” as the grounds for nonrenewal. Pursuant to 24-A M.R.S.A. §§ 3051 and 3054, MMG Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on December 3, 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 MMG Insurance Company appeared at the hearing. Peter & Joanne Ahearn represented themselves at the hearing.

FACTS DETERMINED ON THE RECORD

1. MMG Insurance Company has insured the subject property on a Classic Homeowner Policy, providing Form 3 coverage. An inspection of the premises was made in October 2002.
2. The inspection indicated issues relating to the condition of the roof shingles, a collapsing porch and its steps, and peeling paint.

ANALYSIS AND CONCLUSION OF LAW

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 24-A M.R.S.A. § 3054 requires the insurer to establish the proof or evidence of its reason for nonrenewal.

Jim Stout, Marketing Representative for the insurer, testified that the company received in early October an inspection report and photos which show the deteriorating condition of the property. He submitted the report and photos as evidence. [EXHIBITS 4 AND 5] He stated that Photo 1 shows the curling roof and missing shingles at the side of the porch which are of concern as wind and water damage are covered by the policy. He stated that shingles in this condition are susceptible to infiltration by wind-driven rain which could then get into the structure. Photo 2 shows the rear of the building, documenting that the siding needs paint and the shingles are curling in another area of the roof. Photos 3 and 4 show the condition of the front porch which has a sagging or collapsed floor at the step area, sagging or collapsed steps and a problem with the roof. He testified that the steps and floor present an increased liability exposure which could result in bodily injury to a guest.

Mrs. Ahearn testified that there are chairs and flowers on the porch to make it look more presentable, but that it is not used and that the entrance into the house from the porch is blocked off by a couch placed in front of the door on the inside. However, access to the porch itself from the yard is not restricted. She stated that there is an entrance off the driveway side of the house that they consider the main entrance, and its steps are solid. Mr. Ahearn agreed that the porch needs to be removed, but stated that they do not have the finances to take care of it at this time. He testified that the front and south side of the house have been painted, and the north side has been scraped but is not yet painted. He also conceded that the shingles need replacing, but stated there is another layer underneath and that they do not leak.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 3054. MMG Insurance Company 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 MMG Insurance Company has established adequate grounds for policy nonrenewal.

The condition of the porch, with its sagging roof, collapsing floor and deteriorated steps, represents an increased liability exposure under the policy. Although the roof may not have leaked in the past, the deteriorated condition of the shingles increases the likelihood of leakage. The company has demonstrated that these conditions are rationally related to the insurability of the property.

INDEX OF RECORD:
Exhibit 1 - Proof of Mailing
Exhibit 2 - Nonrenewal Notice
Exhibit 3 - Copy of Policy
Exhibit 4 - 10/02 Inspection report
Exhibit 5 - Photos 1-4

Order and Notice of Appeal Rights

The intended nonrenewal is hereby approved. MMG Insurance Company is directed to continue coverage until March 22, 2003 at 12:01 a.m. to allow the policyholders 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.

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