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

This proceeding arose upon a request for hearing made by John James to contest the pending nonrenewal of homeowners insurance coverage provided to him by York Insurance Company of Maine. On December 6, 2002, the insurer mailed a notice of nonrenewal effective January 27, 2003 on policy number YMSP 69414, citing as the reason for nonrenewal:“conditions were discovered on the property that increase the likelihood of claims occurring. Those conditions include: the chimney is crumbling which presents an increased exposure to both fire and liability losses; the items stored on and around the porch are an increased liability hazard as are the items in the yard. The unfenced above ground pool with the ladder intact and the presence of a trampoline increase the liability exposure; the boarded windows, damaged siding, damaged soffits/eaves and cracked foundation all increase the exposure to weather/water related losses.” 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 January 16, 2003 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. John James represented himself at the hearing.

FINDINGS OF FACT

The following facts have been proven by a preponderance of evidence submitted:

1. York has insured the subject property since January 27, 1999, as a result of a “book roll” from the agency. An inspection conducted in April 1999 indicated only that some areas of paint were worn/weathered.
2. An inspection conducted in October 2002 revealed the property conditions cited as the reason for nonrenewal. Photos show areas of broken, missing and deteriorated siding; a boarded window; an unsecured above ground pool; a large number of items stored around, on, and overhead on the open porch; and a section of what appeared to be cracked foundation area. The inspection also referenced the presence of a trampoline, but it was not evident in any of the photos.

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.

Heather Rosewall, Personal Lines Senior Underwriter for York, testified that the original inspection in 1999 had indicated only worn paint with the overall condition acceptable. She stated that a more recent inspection done this past fall found a number of issues that affect the insurability of the property. She submitted both inspection reports as evidence, and detailed the information obtained from the photos. She stated that the condition of the foundation under the barn increases the exposure to collapse; the condition of the siding increases the likelihood of weather-related losses; the unsecured pool, the trampoline, and the items stored on and around the porch increase the liability exposure; and the condition of the chimney increases the liability due to the exposure from falling bricks as well as the fire exposure. She concluded that the condition of this property presents an increase in the hazards one would expect from the average homeowners exposure.

Mr. James testified that his 1947 Oldsmobile is a collector car, and is not abandoned. He also testified that the chimney in question is solid; there are four offset bricks on the corners as a decorative feature. It appears the inspector assumed bricks were missing and did not realize it was an intentional design. Mr. James provided a close-up photo of the chimney as evidence. He also argued that the trampoline had been gone from his premises for a year and a half. None of the company’s photos showed the alleged trampoline, but the October 2002 inspection report specifically referenced its presence on the property.

Regarding the swimming pool, Mr. James contended that the pool is over four feet high and the back side is six feet high, but the photos provided by both parties do not appear to support that contention. The deck, which is level with the pool’s top edge, appears to be approximately three feet off the ground. Mr. James testified that there is no legal or local requirement to fence the pool, but that he has put a gate across the deck stairs to restrict access and submitted a photo as support. The gate appears to be approximately knee-high, about half the height of the deck railing.

Mr. James testified that the foundation area in question is not part of the carrying foundation, but is actually an area to access the crawl space. He had filled it in with rocks and pieces of wood to keep skunks and other animals out of it. He stated that he has now cemented in cement blocks and installed a door for access. Although he provided a photo of this area, the photo is of poor quality and the subject matter is indeterminate. He also testified that he has put boards up to cover the missing siding, and stated that the asbestos shingles cannot be replaced as they are not available anywhere. He stated that neither the siding, eaves nor frame is rotting.

He also argued the material on the large, wraparound porch has been there for years, therefore there is no increased hazard. The photos provided by both parties show an accumulation of boards, ladders, lawn furniture, screens, windows, lawn and garden equipment, exercise equipment, air conditioners, and cardboard.

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.

Although the policyholder argued that the conditions cited by the insurer have existed for many years and therefore are not an increased exposure of any kind, the reason given by the insurer for nonrenewal cited an increase in the likelihood of claims due to the property condition. The company representative showed that the exposures of this property are an increase over the average homeowners exposure as reflected in the earlier (1999) inspection, and are therefore rationally related to the insurability of the property. The evidence on the record shows siding that is cracked and deteriorated, increasing the exposure to weather related losses, and there is an increased liability exposure due to the haphazard storage of items on the porch and the inadequately secured swimming pool. Although local codes may not require specific fencing or gating of an above-ground, an insurer may establish reasonable requirements to limit the liability exposure. Even if the pool walls were of sufficient height, the “gate” installed on the deck is low enough to step over.

INDEX OF RECORD:
Exhibit 1 – Copy of Policy
Exhibit 2 – Postal Proof of Mailing
Exhibit 3 – 1999 Inspection
Exhibit 4 – 2002 Inspection
Exhibit 5 – Insured’s photos

ORDER AND NOTICE OF APPEAL RIGHTS

The intended termination is hereby approved. York Insurance Company of Maine is directed to continue coverage until May 30, 2003 at 12:01 a.m. to provide an opportunity for Mr. James 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 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