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Steven Swann v. York Insurance Company of Maine
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 statement.
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.

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