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Steven Swann v. York Insurance Company of
Docket No. INS-05-2060, Decision Issued October 14, 2005.
The insured requested a hearing following receipt of a notice of cancellation
of homeowners insurance coverage citing nonpayment of premium as the
reason for cancellation. At hearing, the company testified that changes
were made on renewal that resulted in an increased premium. The representative
stated that an initial bill was sent out for the renewal and when no
payment was received, a subsequent bill and cancellation notice were
sent. The insured did not attend the hearing either in person or by
Held: For the company. Title 24-A M.R.S.A.
§ 3049(1) permits an insurer to cancel a policy for nonpayment
of premium, which is defined as the “failure of the named insured
to discharge when due any of his obligations in connection with the
payment of premium on the policy, or any installment of a premium…”
The insured did not indicate in his hearing request or attend the hearing
to allege that he is disputing the amount of premium charged or that
his payment has not been acknowledged by the company. The company has
demonstrated that the premium was billed prior to its due date and that
no payment was received. The company issued the cancellation notice
to the insured’s last known address and it was received by the
insured after the premium due date. See 24-A M.R.S.A. §§
3049(1), 3050. The cancellation notice further meets the 10-day notice
requirement provided in § 3050.
The company was not required to issue a cancellation notice when payment
for renewal was not received. See 24-A M.R.S.A. § 3051(2).
However, as the company issued a cancellation notice and also offered
the insured additional opportunity to pay by the cancellation date to
maintain coverage, the company placed itself under the requirements
of a mid-term cancellation action. The requirements to cancel the policy
have been met.
Return to Cancellation / Nonrenewal Hearing