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Roland & Nicole Hubbard v. Concord General Mutual Insurance Company
Docket No. INS-05-2079, Decision Issued November 21, 2005.

The insureds through their attorney requested a hearing following receipt of a notice of homeowners insurance cancellation citing as the reason for cancellation an act which caused a loss. At hearing, the company argued that the act was grossly negligent and the loss could have been avoided. Mrs. Hubbard maintained that the cause of the loss was accidental.

Held: For the insureds. Under the Maine Property Insurance Cancellation Control Act, a policy may be cancelled for a reason based upon one or more permitted grounds of 24-A M.R.S.A. § 3049. Prior to July 30, 2004, those grounds included the “[d]iscovery of grossly negligent acts or omissions by the insured substantially increasing any of the hazards insured against.” Effective July 30, 2004, section 3049 was amended to change “grossly negligent acts or omissions” to simply “negligent acts or omissions.” The evidence submitted by the company indicates that the company did not change its forms to reflect the new statutory language. Thus, the company must establish that in accordance with its stated contractual reason for cancellation, the act at issue was “grossly negligent.”
While Mr. Hubbard’s action may have been negligent and substantially increased one of the hazards insured against, it did not rise to the level of being grossly negligent as required by the policy for cancellation. Thus, the company has not met the requirements to cancel the policy at issue.

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