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Richard W. Bingaman v. Interinsurance Exchange of the Automobile Club

Docket No. INS-06-2088, Decision Issued September 12, 2006

The insured requested a hearing following receipt of a notice of cancellation of automobile insurance coverage citing nonpayment of premium as the reason for cancellation. At hearing, the company testified regarding the billing and payment history of the policy. The insured did not attend the hearing either in person or by statement.

Held: For the company. Title 24-A M.R.S.A. § 2914(1) permits policy cancellation for nonpayment of premium. Section 2912(3) defines “nonpayment of premium” 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 company sent two bills to the insured no portion of which were paid. The insured remitted payment five days late on another bill. Although in his hearing request, the insured alleges that the premium amounts were erroneous and he was unaware of the past amounts due, the evidence supports neither position. The policy includes nonpayment of premium as one of its permissible cancellation reasons. The evidence further indicates that the cancellation notice was received by the insured after the premium due dates as required by § 2914(1). The company has demonstrated that it has met the requirements to cancel this policy for nonpayment of premium.