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Maine.gov > PFR Home > Insurance Regulation >Administrative & Enforcement Actions > Cancellation Hearing Index > Cancellation / Nonrenewal : Docket No. INS-10-2108 Decision
Richard Reaser II and Christine Reaser v. United Services Automobile Association
Held November 30, 2010 - Docket No. INS-10-2108
The named insured requested a hearing to contest the nonrenewal of a homeowners policy for a frequency of claims rendering the company’s rate structure inadequate. The company established that the premium generated from its rating plan was insufficient to address the anticipated future losses of a policy that had seven claims in the past five years, and a total of 14 in 10 years.
Held: For the company. Although 24-A M.R.S.A. § 3051 states that “loss record” and similar insurance terms are by themselves insufficient reasons for nonrenewal of this type of policy, the company’s stated reason was that its rate structure was inadequate considering the frequency of losses for this property. The company demonstrated that its rating plan, even though it includes loss surcharges, does not contemplate and cannot adequately price for this type of loss frequency. This meets the requirement that the reason for nonrenewal be in good faith and related to the insurability of the property.
Last Updated: January 16, 2014
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