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

Sandra Butters v. Patriot Insurance Company
Docket No. INS-07-2081, Decision Issued November 27, 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 its recommendations. The insured disputed the need for certain recommendations.

Held: For the company. The Maine Property Insurance Cancellation Control Act permits 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).

This policy does not mirror the statute, however. 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 in which the insured must comply with the recommendations starts after the insured receives the company’s intent to cancel the policy. An insurer is free to establish terms in its policy that are more favorable to the insured than 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 company’s intent to cancel the policy was conveyed by the cancellation notice. The cancellation effective date was more than 90 days after the insured received the notice. Accordingly, the company has successfully demonstrated conveyance of the recommendations as well as the provision of 90 days for compliance with the recommendation after receipt of notice of its intent to cancel the policy. The company also demonstrated that the majority of the required recommendations were developed directly from an analysis by a qualified licensed engineer. The company related the cited conditions to potential losses covered by the policy, therefore demonstrating that those conditions are reasonable.

The insured confirmed that none of the recommendations has been addressed. Although she maintained that she was told by her contractors not to perform any repairs prior to resolution of a claim, such advice did not come from the company or the agent. The company’s notice satisfied the requirements of section 3050. This cancellation action is approved.