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This proceeding arose upon a request for hearing made by Susan Kendrick to contest the pending nonrenewal of homeowners insurance coverage provided by York Insurance Company of Maine. On December 18, 2002, York Insurance Company of Maine mailed a notice of nonrenewal effective February 12, 2003 on homeowners policy number YMKA95521, citing “the number of animals kept by the insured makes this an unacceptable risk to the company” as the grounds for nonrenewal. Pursuant to Title 24-A M.R.S.A. §§ 3050 and 3054, York Insurance Company of Maine provided the insured with proper notice and the insured's hearing request was timely.

The hearing was held on January 23, 2003 with Mary Ellen Albert sitting as designated hearing officer pursuant to Title 24-A M.R.S.A. §§ 210 and 3054. The purpose of the hearing was limited to establishing the existence of the 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. Susan Kendrick represented herself at the hearing.

Findings of Fact

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

1. Susan Kendrick has been insured with York Insurance Company of Maine or its predecessors since 1983.
2. In an application for an umbrella policy made with York on January 31, 2002, Ms. Kendrick listed seven horses, six ducks, four chickens and one goat in addition to her household pets.

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, testified that at the time Susan Kendrick made out an application for an umbrella policy, it was discovered she had seven horses, six ducks, four chickens and a goat in addition to her household pets. Ms. Rosewall pointed out that York Insurance Company’s guidelines for farming exposures allow for a maximum of five animals on their personal homeowners policies. Ms. Rosewall testified that the greater number caused an increase in the liability exposure. Also, in the event of an injury, the company would have the duty to defend. She stated that the duty to defend would exist even if there was no negligence on Ms. Kendrick’s part. Ms. Rosewall further stated that in case of an accident, the company would be required to respond. Ms. Rosewall added that the amount of hay required for that number of horses could pose a fire hazard.

Ms. Kendrick testified that one of her horses had died and two of her horses are miniatures that only stand 34 inches high. She stated that she felt that should make a difference. She further stated that she was not aware of the company guidelines limiting the number of animals to five. Ms. Kendrick stated that she had applied for an umbrella and listed the animals on the application. She also stated that in August, when she was having an issue with her automobile policy, she had asked her agent if she should be looking for a new carrier for her homeowners as well as her automobile coverage. Ms. Kendrick stated that the agent had responded that she should be fine as long as she paid her premiums on time. Ms. Kendrick also stated that she had cancelled her umbrella policy to decrease her insurance bill, due to financial difficulties.

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 has established adequate grounds for policy nonrenewal.

The policy in question includes coverage for damages for which the insured could be legally liable. It also includes coverage for medical payments for injury to a person (other than the insured or regular household residents) resulting from an accident on the insured location. Medical payments coverage is also extended for bodily injury occurring to a person off the insured location from four stated conditions, one being “caused by an animal owned by or in the care of an insured.” Thus, liability for personal injury caused by the animals, whether on or off the insured premises, is one of the hazards insured against.

The policy covers, in addition to the dwelling, other structures on the premises not used for business. Therefore, a fire or other type of loss to the barn is also within the scope of the policy.

Ms. Kendrick did not dispute the number of animals on her premises, but she was not aware that the limit existed. Based on the testimony, it has been determined that the number of animals exceeds the company’s standards for a homeowners exposure, and is a good faith reason rationally related to the insurability of the property.

INDEX OF RECORD
Exhibit 1 - copy of policy
Exhibit 2 - proof of mailing
Exhibit 3 - umbrella application
Exhibit 4 - company guidelines
Exhibit 5 - hearing request

Order and Notice of Appeal Rights

The intended nonrenewal is hereby approved. York Insurance Company of Maine is hereby directed to continue policy # YMKA95521 until March 27, 2003 at 12:01 a.m. to allow Ms. Kendrick time 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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