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This proceeding arose upon a request for hearing made by David Dorr to contest the pending nonrenewal of homeowners insurance coverage provided to him by Concord General Mutual Insurance Company. On November 19, 2002, the insurer mailed a notice of nonrenewal effective January 24, 2003 on policy number H 159028, citing “condition of property - paint and addition” as the grounds for nonrenewal. Pursuant to 24-A M.R.S.A. §§ 3051 and 3054, Concord General Mutual Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on January 22, 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. Both parties submitted a sworn statement in lieu of appearance at the hearing.

FINDINGS OF FACT

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

1. Concord has insured the subject property since January 24, 2002.
2. The company was concerned that photos received with the application showed deteriorated siding and a lack of a proper door on the garage. A recent photo received from the agent did not seem to demonstrate any improvement.

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 the reason or reasons shall be explicit. 24-A M.R.S.A. § 3054 requires the insurer to establish the proof or evidence of their reason for nonrenewal.

Alison Jones, Personal Lines Underwriter for the Concord Group, testified that photos and the application were received 2/11/02. She stated that in reviewing the photos it was determined that the condition of the siding had deteriorated to the point where the potential for a loss to the dwelling had increased to an unacceptable level. She further stated that the attached garage appeared to have a piece of plywood over one opening, thereby lacking a proper door for this type of structure.

Although a new business cancellation, allowable for a policy which hs been in effect for less than 60 days, could have been initiated as a result of those concerns, the company did not do so; instead it contacted the agent on March 25, 2002, to express concerns about the siding and the apparent temporary plywood door. Ms. Jones stated that the agent in turn advised the insured of the issues and of the potential of a nonrenewal. She submitted a copy of the letter the agent sent to Mr. Dorr dated April 8, which references the “overall condition” of the home, and asks if he will be “doing some work to the exterior.” No specific mention of the siding or the garage door was made.

Ms. Jones testified that missing, damaged or deteriorated siding substantially increases the chance for a loss, and stated that the updated photo did not appear to demonstrate any change in the siding. She further stated it was difficult to see if there was any change to the opening of the attached structure.

In his affidavit, Mr. Dorr agreed that there is an exterior wall that needs painting, but that it cannot be done until spring. He also stated that improvements he has made to the home since Concord has insured it include replacing the fuse box with circuit breakers, installing a new service entrance and re-wiring the home.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 3054. Concord General Mutual 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 Concord General Mutual Insurance Company has not established adequate grounds for policy nonrenewal.

The company testimony began by stating that it would establish the relationship of the condition of the siding and the plywood over the garage opening to its insurability, and ended by asserting that the reason given in the nonrenewal notice is an explicit, good faith reason rationally related to the insurability of the property. The reason stated in the notice of nonrenewal was “condition of property - paint and addition,” which does not indicate that the concern is deteriorated siding, only deteriorated paint. In addition, there is no evidence that concern over the door to the garage was ever articulated to the insured by the agent, and it cannot be deduced from the reason given for nonrenewal. From the evidence on the record, the hearing officer cannot determine if the concern is for the large opening for the vehicle, or the regular door. Both doors are indistinct in the original photo, and neither door can be seen in the more recent photo. The testimony focuses on the condition of the siding, but has provided no evidence that any of the siding on this home is missing, damaged or deteriorating. The black and white photos submitted by Concord do indicate that the paint on the wall next to the driveway could use some attention, but the photos do not constitute proof that the siding is damaged. The reason given on the notice is vague and general, while the testimony concerned two specific issues that were unsupported by the evidence.

INDEX OF RECORD:

ORDER AND NOTICE OF APPEAL RIGHTS
The intended nonrenewal is not approved. Concord General Mutual Insurance Company is directed to renew policy #H159028 on the same terms as the expiring policy.

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.

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