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Michael Philbrick, Sr. v. Patrons Oxford Insurance Company
Docket No. INS-07-2034, Decision Issued May 3, 2007.

The insured requested a hearing following receipt of a notice of homeowners insurance policy cancellation citing the failure to comply with loss control recommendations as the reason for cancellation. At hearing, the company discussed the recommendations that were issued to the insured and the concerns it had regarding the house. The insured maintained that the recommendations were unreasonable because the company required compliance during the winter months.

Held: For the insured. The Maine Property Insurance Cancellation Control Act permits policy cancellation if the insured fails to comply with reasonable loss control recommendations within 90 days after notice from the insurer. 24-A M.R.S.A. § 3049(10). However, the applicable cancellation ground in the insurer’s policy does not mirror the statute. Instead, the policy permits cancellation for “your failure to comply with reasonable loss control recommendations within 90 days after you receive from us our intent to cancel the policy.” Under the wording of the policy, the 90-day period to comply with the recommendations starts after the insured receives notice of the company’s intent to cancel the policy, not after receipt of the recommendations. An insurer is free to establish terms in its policy that are more favorable to the insured than what is provided by the statute. However, the insurer is then bound by such terms and unable to rely upon the actual statutory language in a cancellation action.

The cancellation notice was the company’s “intent to cancel the policy” from which the 90 days to complete the recommendations may be calculated. Accordingly, the proposed cancellation effective date is premature as it allows only three weeks following the insured’s receipt of the cancellation notice for compliance of the recommendations. This cancellation action fails as compliance with the recommendations cannot be assessed until passage of the 90-day period after the insured’s receipt of the company’s intent to cancel.