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Don & Sheila Penney v. Citizens Insurance Company of America
Docket No. INS-07-2087, Decision Issued September 17, 2007.

The insureds requested a hearing following receipt of a notice of homeowners insurance cancellation citing a change in the exposure and the existence of a daycare at the home as the reason for cancellation. At hearing, the company representative stated that she had no personal knowledge of the issues in the case, and she read into the record a statement of events prepared by someone else. The written statement she read was not sworn. The insureds did not appear at the hearing.

Held: For the insureds. In the present case, the company representative who testified had no personal knowledge of the case. She did not review the underwriting file. She had no contact with the agency regarding this matter. As the representative’s only knowledge of this issue stemmed from the unsworn statement of another company employee, her testimony regarding the substance of the case is meaningless.

The company’s cancellation reason appears to be relying upon 24-A M.R.S.A. § 3049(5), which permits policy cancellation for physical changes in the insured property that result in the property becoming uninsurable. The company did not demonstrate that any physical change in the property has occurred. In addition, the company did not explain how the existence of the alleged daycare renders the property uninsurable. The Superintendent of Insurance hereby concludes that the company has not demonstrated adequate grounds to cancel this policy.