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Christopher & Mellette Pepin v. Main Street America Assurance Company
Docket No. INS-05-2012, Decision Issued July 14, 2005.

The insureds requested a hearing following receipt of a notice of automobile insurance coverage cancellation citing nonpayment of premium. At hearing, the company maintained that the insureds had always paid the minimum due prior to the cancellation date until recently. The company representative gave details surrounding the issuance of a prior cancellation notice and stated that a new bill was sent that would have brought the insureds’ account up to date. He noted that following the issuance of that bill, another vehicle was added to the policy which generated additional premium. He stated that the cancellation notice at issue requested a minimum that included the past due amounts, a charge for the recent endorsement, and the current month’s billing. Mrs. Pepin testified that she had attempted to pay the amount billed but after the due date, and she disputed the need to pay an amount that was double the previous regular premium in order to maintain coverage.

Held: For the company. Title 24-A M.R.S.A. § 2914(1) permits an insurer to cancel a policy when the insured does not pay the full premium amount when due. The company correctly billed the insureds an amount that was not paid by the due date. The company then issued a cancellation notice for the past due amounts, the next installment and the additional amounts due as a result of recent coverage changes. Although not required by law, the company’s cancellation notice offered the insureds the opportunity to maintain coverage if the total amount requested was paid by the cancellation date. The insureds did not pay the full amount requested, thus rejecting the company’s offer. The company’s cancellation notice was deemed received by the insureds pursuant to 24-A M.R.S.A. § 2915 after the premium due date, and it meets the requirements of § 2914(1).

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