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The Crafters Choice, Doris Mower v. York Insurance Company of Maine
Docket No. INS-05-2050; Decision Issued September 12, 2005

The insured requested a hearing following receipt of a notice of cancellation of a commercial package policy citing nonpayment of premium. At hearing, the company testified that the insured had been billed a certain amount and that payment had not been timely received. However, the insured subsequently made an overpayment. The company stated that the insured was then billed for the balance of the next installment but no payment was received by the due date. A cancellation notice was then issued. The company further maintained that an inspector found the insured premises to be significantly bigger than the space upon which the original quote had been based, and the amount of coverage and corresponding premium on the policy was adjusted accordingly. The insured did not appear at the hearing either in person or by statement.
Held: For the company. Title 24-A M.R.S.A. § 3007(2)(A) permits cancellation of the subject policy for nonpayment of premium, which is defined by section 3007(1)(C) as “the failure or inability of the named insured to discharge any obligation in connection with the payment of premium on a policy of insurance subject to this section…”
The company has demonstrated that the insured failed to pay the remainder of the second installment of a 4-payment policy. The insured first paid an amount that was greater that the amount due for the first installment but was short of covering the first and second installments together. The remainder on the second installment was not paid by or subsequent to the due date. Although in her hearing request, the insured questioned the propriety of increasing her building coverage without her consent, these issues are unrelated to the present matter; the insured was not charged for any of the additional premium in the missed second installment bill. The Company has demonstrated that its cancellation of the policy is in accordance with the governing statute.

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