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Jammie & Kim Alexander v. Patrons Oxford Insurance Company
Docket No. INS-07-2107, Decision Issued November 30, 2007.

The insureds requested a hearing following receipt of a notice of homeowners insurance nonrenewal citing certain conditions of the property, a trampoline, an improperly fenced swimming pool, the failure to comply with a loss control recommendation, and physical changes in the property resulting in the property becoming uninsurable as the reasons for nonrenewal. At hearing, the company presented evidence of the areas of concern. The insureds did not appear at the hearing.

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. Section 3049(7) permits cancellation for “[t]he presence of a trampoline on the premises if the insured is notified that the policy will be cancelled if the trampoline is not removed and the trampoline, after notice, remains on the property 30 or more days after the date of notice.” Section 3049(8) permits cancellation for “[t]he presence of a swimming pool upon the insured property that is not fenced in, in accordance with the standards established in Title 22, section 1631, if the pool remains in noncompliance with those standards for 30 days after notice of the defective condition and intent to cancel the policy.”

The company has invoked the cancellation grounds in §§ 3049(7), (8) but it has not demonstrated compliance with all requirements of these provisions. Accordingly, the trampoline and swimming pool may not provide grounds for nonrenewal. Additionally, although the company cited section 3049(5), which permits cancellation for “[p]hysical changes in the insured property that result in the property becoming uninsurable,” the company has not demonstrated how the property is uninsurable due to any of the physical changes cited.

The remaining reasons, however, do provide grounds for nonrenewal. The company connected the other cited conditions to the insurability of the property by explaining the impact that the various conditions have on insurability. In its nonrenewal notice, the company further invoked section 3049(10), which permits cancellation for the failure to comply with loss control recommendations within 90 days after notice from the insurer. The company demonstrated that it issued a reasonable loss control recommendation to the insured to fix a condition, and the condition still existed after the expiration of the 90-day period for compliance. The company has met its burden of proof as required by section 3054. The company has further demonstrated compliance with the notice requirements of § 3051. Accordingly, this nonrenewal action is permitted.