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Steven Kovacs & Lynne Hathaway v. Middlesex Mutual Assurance Company

Held May 4, 2009 – Docket No. INS-09-2035
Decision Issued: June 3, 2009

The insured requested a hearing to contest the nonrenewal of a homeowners policy for failure to take steps to protect against loss, which resulted in two losses from the same peril. The company provided evidence of the losses and the record shows that the insured has not made a reasonable effort to prevent such losses.

Held: For the company. The Maine Property Insurance Cancellation Control Act permits nonrenewal if the reason is in good faith and related to the insurability of the property. The record shows that the insured expects loss control to be the company’s responsibility, not his own, and the insured indicated that the company has not directed him to take any specific steps to prevent loss. This indicates a morale hazard which affects the insurability of the property. The law does not require an insurer to issue loss control recommendations, but does permit nonrenewal for the reasons indicated above.