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William Eldridge v. New England Guaranty Insurance Company
Held May 19, 2011 - Docket No. INS-11-2031
Decision Issued: May 26, 2011

The named insured requested a hearing to contest the cancellation of homeowners insurance for nonpayment of premium. The company failed to establish that bills or the cancellation notice were mailed to the named insured’s last known address, or that the cancellation notice was deemed received after the premium due date.

Held: For the insured. In order for a cancellation notice to be effective, an insurer must comply with the requirements of the Maine Property Insurance Cancellation Control Act – 24-A M.R.S.A. § 3049(1) states that a notice of cancellation for nonpayment of premium is not effective unless deemed received after the premium due date pursuant to section 3050, which further provides that a postal certificate of mailing to the named insured at the insured’s last known address is conclusive proof of receipt on the 5th calendar day after mailing.” The company failed to establish the due date of the premium for which the cancellation notice was issued, and did not mail the cancellation notice to the billing address the insured had notified the company should be used. Accordingly, the company did not comply with statutory requirements, rendering its cancellation notice ineffective.