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John and Kellie Thomas v. MMG Insurance Company

Held October 20, 2009 – Docket No. INS-09-2113
Decision Issued: October 22, 2009

The insureds requested a hearing regarding the nonrenewal of a homeowners policy for lack of a central heat system as evidenced by a recent loss. The company argued that the loss demonstrated its concern with the lack of a central heat system.

Held: For the insured. The evidence showed that the cause of the cited loss was unrelated to the type of system heating the home, but was due to a failure of an exterior gas regulator which controlled the supply of fuel to the heater. 24-A M.R.S.A. § 3051 permits nonrenewal for a reason that is in good faith and related to the insurability of the property, but the evidence did not support the stated reason. The company also raised the issue of misrepresentation in the application, but that reason was not articulated in the reason given for nonrenewal.