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Lawrence Dansinger & Karen Marysdaughter v. MMG Insurance Company
Docket No. INS-06-2041, Decision Issued May 22, 2006.

The insureds requested a hearing following receipt of a notice of homeowners insurance policy nonrenewal citing the failure to comply with reasonable loss control recommendations as the reason for nonrenewal. At hearing, the company alleged that the insureds have not complied with its loss control recommendation and that the home is susceptible to a loss. Mr. Dansinger disputed the company’s allegations and further argued that the company’s recommendation was vague.

Held: For the insureds. The applicable statute, 24-A M.R.S.A. § 3051, provides that the “reason for nonrenewal must be a good faith reason and related to the insurability of the property or a ground for cancellation pursuant to section 3049.” Section 3049(10) permits policy cancellation for the failure to comply with reasonable loss control recommendations within 90 days after notice from the insurer.
It is arguable that the recommendation was not clearly conveyed to the insureds. However, of primary concern is the company’s failure to establish that the recommendation was reasonable. The insured testified regarding the size of the area at issue and the adequacy of the current arrangement. The company repeatedly argued that the current arrangement is insufficient but it was unable to provide evidence to support its position. Further, the company has insured the home for many years without the requested measure and no losses have occurred. The company has failed to establish that the recommendation was reasonable as it pertains to these particular circumstances.

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