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Donald & Jean Davenport v. Certain Underwriters at Lloyds, London
Docket No. INS-06-2001, Decision Issued February 2, 2006.

The insured requested a hearing following receipt of a notice of homeowners insurance coverage nonrenewal citing unfavorable loss experience as the grounds for nonrenewal. At hearing, the company argued that a homeowners policy is not appropriate for the exposure that currently exists.

Held: For the insured. The plain language of 24-A M.R.S.A. § 3051 requires that a company’s stated reason for nonrenewal be explicit, and insurance language such as “loss record” and similar terms are not acceptable explanations of an insurer’s intended nonrenewal. The company argued that its action was due to the change in circumstances and exposure, but this was not given as a reason in the notice of nonrenewal. The reason given to the insured does not meet the specificity requirement of the statute and by itself is insufficient as an explanation for the proposed nonrenewal. Accordingly, the company’s proposed nonrenewal is denied.

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