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Linda Sommer v. Citizens Insurance Company of America

Held June 22, 2012 – Docket No. INS-12-2041
Decision Issued:  July 3, 2012

The named insured requested a hearing to contest the nonrenewal of her homeowners policy for the number and nature of losses that had occurred.  The policy includes a guaranteed renewal provision

Held: For the insured. Although 24-A M.R.S. § 3051 allows nonrenewal if based upon a reason that is in good faith and related to the insurability of the property, contractual requirements must also be considered. While an insurer is free to establish terms in its policy contract that are more favorable to the insured than what is provided in statute,  the insurer is then bound by such terms and may be precluded from taking action that would otherwise be allowed by statute. As the insurer failed to demonstrate that the guaranteed renewal provision did not apply, the contract does not allow a nonrenewal. Accordingly, the viability of the company’s reason for nonrenewal was not assessed. 

Last Updated: April 15, 2014