Archives: 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008

Lou Ann Haley v. Patrons Oxford Insurance Company
Docket No. INS-07-2025, Decision Issued April 30, 2007.

The insured requested a hearing following receipt of a notice of homeowners insurance coverage nonrenewal citing the preventability of two similar losses and the increased risk for potential future losses of the same kind as the reasons for nonrenewal. At hearing, the company maintained that the losses were similar and could have been prevented. The insured discussed the losses.

Held: For the company. 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. The company must also clearly state that connection in its nonrenewal notice.

The evidence establishes that two similar losses have occurred as a result of the insured’s activities. The insured has not established that she will refrain from these activities. The insured further has not established that she has taken or will take adequate precautions to prevent a similar loss in the future. The company has demonstrated that the insured’s lack of reasonable actions caused at least one of the losses and absent evidence of adequate precautions, the risk of another loss exists. The company has demonstrated that its reason for nonrenewal is a good faith reason related to the insurability of the property.