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Michael & Maryellen Abbey v. Amica Mutual Insurance Company
Docket No. INS-07-2053, Decision Issued June 19, 2007.

The insureds requested a hearing following receipt of a notice of homeowners insurance coverage nonrenewal citing conditions of the property and the failure to comply with loss control recommendations as the reasons for nonrenewal. The notice identified five specific conditions. At hearing, the company presented evidence of three inspections and the representative testified that certain conditions had remained unchanged. The insureds discussed the conditions.

Held: For the company. An insurer may decline to renew a policy for a good faith reason related to the insurability of the property or a cancellation ground pursuant to section 3049. 24-A M.R.S.A. § 3051.

The company’s notice articulated two reasons for nonrenewal: 1) the condition of the property with respect to the conditions cited, and 2) the failure to comply with reasonable loss control recommendations. Although five specific conditions were cited, three conditions may not provide grounds for nonrenewal. The company representative did not provide testimony regarding one of the issues and she stated that another was an error. The insureds have demonstrated that the third condition has been rectified. There remain only two conditions for consideration.

The company has established that one of the remaining conditions presents an increase in liability hazard and that the other condition also could impact covered hazards. The company has demonstrated that these two conditions are good faith reasons related to the insurability of the property.

The notice of nonrenewal also cited the failure to comply with loss control recommendations as a reason for nonrenewal. The company outlined the reasonableness of the two remaining recommendations by explaining the hazards increased by each condition. The company further allowed almost a year for compliance with the recommendations. The company has provided sufficient evidence to support this nonrenewal action.