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Mary Ellen Crowley v. MMG Insurance Company

Held March 19, 2009 – Docket No. INS-09-2013
Decision Issued: March 23, 2009

The insured requested a hearing to contest the company’s intended nonrenewal of her homeowners policy for the specified conditions including a deteriorated roof and lack of railings on steps, an issue with the electrical system, and a rental apartment that did not meet the company’s habitational underwriting guidelines.

Held: For the company. Although the company had listed ten separate bases for the nonrenewal action, nonrenewal was granted only on the basis of the deteriorated roof and lack of railings. Specific reasons raised at the hearing relating to electrical fixtures and eligibility requirements for rental units were not considered as the nonrenewal notice did not state those issues as reasons for the nonrenewal action. Section 3051 requires the reason or reasons to be explicit, and the insured was unaware until the hearing of the issues relating to the rental unit or electrical fixtures. In addition, several other reasons were dismissed because either the stated reason did not clearly identify the issue or the company failed to explain how the issue related to the insurability of the property. Because the company established the condition of the roof and lack of railings, and their relation to insurability, those reasons supported the nonrenewal action.