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Stephen and Debra Hides v. Concord General Mutual Insurance Company

Held September 5, 2013 – Docket No. INS-13-2083
Decision Issued:  September 27, 2013

The named insured requested a hearing to contest the nonrenewal of homeowners policy as incomplete new construction after nine months did not meet the company’s guidelines and the coastal exposure exceeds the company’s acceptable risk.  The company failed to establish a permitted reason for nonrenewal.

Held: For the insured. 24-A M.R.S. §§ 3051 and 3054 require the stated reason for nonrenewal to be explicit and both prohibit simple assertions such as “underwriting reasons” or “location of risk.” The Bureau considers “does not meet company guidelines” and “exceeds the company’s acceptable risk” as equivalent insufficient proof or evidence to support a nonrenewal action.  At hearing, the company raised the argument that its rates are inadequate for the coastal exposure, but this concept was not conveyed in the stated reason for nonrenewal; even if it had been, the company did not sufficiently document the inadequacy. The company also argued that it had no knowledge of the coastal exposure when it accepted the risk, but the record did not support this.  Accordingly, the nonrenewal was not permitted.

Last Updated: April 15, 2014