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Millmark Products v. Peerless Insurance Company

Held January 25, 2011 - Docket No. INS-10-2128
Decision Issued: January 28, 2011

A hearing was requested by the personal representative of the named insured’s estate to contest cancellation of a homeowners policy for “vacant property.” The company did not provide sufficient notice before the cancellation and the stated reason for the cancellation was not included as a basis for cancellation in the policy contract.

Held: For the insured. Bureau of Insurance Rule 355 Section 7.C. requires the insurer to prove that the stated reason is both a permitted cancellation ground under 24-A M.R.S.A. § 3049 and included as a basis for cancellation under the terms of the subject policy. The policy only reflects the original five cancellation grounds in effect in 1998, and therefore the company is unable to utilize 24-A M.R.S.A. § 3049(6), which was enacted in 2004. Additionally, the company failed to comply with the notice requirement of section 3050. Based upon the postal certificate of mailing provided by the company, the insureds were given only 8 full days of notice before cancellation, not 20 days as required by § 3050. See Valley Forge Insurance Co. v. Concord Group Insurance Co., 623 A.2d 163 (Me. 1993).