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Elaine Oeder v. Cambridge Mutual Fire Insurance Company
Docket No. INS-07-2023, Decision Issued April 23, 2007.

The insured requested a hearing following receipt of a notice of homeowners insurance policy nonrenewal citing the failure to comply with loss control recommendations and the existence of several property conditions as the reasons for nonrenewal. At hearing, the company stated that the work at issue had not been performed and the insured had not indicated any intention to comply with the recommendations. The insured maintained that certain repairs have been completed and she provided evidence of her intention to complete the remaining item.

Held: For the insured. The Maine Property Insurance Cancellation Control Act permits policy nonrenewal if the insured fails to comply with reasonable loss control recommendations within 90 days after notice from the insurer. See 24-A M.R.S.A. §§ 3049(10), 3051, 3054. If an insurer’s reason for nonrenewal is not based upon a cancellation ground in 24-A M.R.S.A. § 3049, section 3054 requires the insurer to establish proof or evidence that the reason is a good faith reason and related to the insurability of the property.

In proving that the insured failed to comply with reasonable loss control recommendations, the company correctly provided as evidence the loss control recommendation letter issued to the insured. The company also provided the inspection report and photographs. However, the photographs give little detail of the conditions leading to the recommendations. Moreover, the company did not establish through its testimony the reasonableness of the recommendations.

In demonstrating that the conditions described in the nonrenewal notice are good faith reasons related to the insurability of the property, the company did not present any argument or evidence explaining why or how the conditions impact the insurability of the property. The photographs are insufficient to establish the relationship to insurability. Accordingly, the company has not met its burden of proof to prevail in this nonrenewal action.