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Kathy & Jeffrey Young v. MMG Insurance Company
Docket No. INS-06-2121, Decision Issued November 28, 2006.

The insured requested a hearing following receipt of a notice of homeowners insurance coverage nonrenewal citing the number and nature of continuing losses as the reason for nonrenewal. At hearing, the company maintained that the losses would continue if the underlying issues were not corrected. The insured discussed the measures that have been taken in response to the losses.

Held: For the insured. 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 3051 also states that “loss record” by itself is not an acceptable reason for nonrenewal. A company must demonstrate a nexus or pattern to illustrate that the cause or nature of past claims is such that similar or continued future claims are likely.
Although the company argued that the losses were similar in nature, the evidence on the record is insufficient to establish a similarity. It is clear from the company’s testimony that the policy would not have been subject to a nonrenewal action had the claims not occurred. Despite the involvement of one factor in each loss, the company failed to demonstrate that the losses were causally related and that future such claims are likely. Therefore, it did not establish that its reason for nonrenewal is related to the insurability of the property.