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David and Stacy Baker v. New England Guaranty Insurance Company

Held August 19, 2008 - Docket No. INS-08-2069
Decision Issued: September 19, 2008

The insured requested a hearing regarding the company’s proposed cancellation of homeowners insurance for failure to comply with reasonable loss control recommendations.

Held: For the insured. Bureau of Insurance Rule Chapter 355 requires an insurer to demonstrate, for a cancellation action, that the grounds for cancellation appear in the policy contract. The evidence demonstrated a discrepancy regarding whether the Maine Amendatory form 2005 listed on the policy was actually attached to the insured’s policy. There was reason to believe that the 2004 version, which does not include failure to comply with reasonable loss control recommendations as a ground for cancellation, was the form provided to the insured. Even without that concern, the company failed to provide support that its recommendation for loss control was reasonable.