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Elaine Oeder v. Cambridge Mutual Fire Insurance Company
Docket No. INS-07-2113, Decision Issued December 11, 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 loss control recommendations. The insured discussed her response to the 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). However, this 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.

In this case, the company issued an earlier recommendation letter and subsequent nonrenewal notice for the insured’s failure to comply with those recommendations. The Superintendent ordered the company to renew the policy because it failed to prove certain statutory elements at hearing. This time, the company demonstrated that the unfulfilled recommendations were reasonable and that at least 90 days has elapsed since receipt of the earlier nonrenewal notice. In addition the company provided notice of the cancellation action pursuant to § 3050. The company has met the requirements to cancel this policy.