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Thomas v. Laura Kelly v. Hanover Insurance Company
Docket No. INS-07-2116, Decision Issued December 19, 2007.

The insured requested a hearing following receipt of a notice of homeowners insurance cancellation citing the lack of owner occupancy and the presence of a tenant as the reasons for cancellation. At hearing, the company maintained that a homeowners policy requires a property to be owner occupied, and a home no longer qualifies for such coverage when it is tenant occupied. In a sworn statement, the insured discussed the circumstances surrounding the cancellation action.

Held: For the insured. The Maine Property Insurance Cancellation Control Act permits cancellation of a policy for a reason based upon one or more of the permitted grounds in 24-A M.R.S.A. § 3049. Section 3049(6) permits cancellation when the insured property is vacant and custodial care is not maintained.

“Vacant” and “no longer owner occupied” are two different states of occupancy; only vacancy can trigger § 3049(6). The insured property is not vacant as a tenant resides there. When the hearing officer asked the company representative to identify which of the allowable cancellation grounds permitted this action, the representative emphasized the eligibility requirements of the policy form. Section 3049 does not allow cancellation merely because the property does not meet eligibility guidelines. As the company made no argument to reasonably connect the presence of a tenant with any of the statutory grounds, this cancellation action is not permitted.