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Anita Flood v. NGM Insurance Company

Held December 19, 2013 – Docket No. INS-13-2120
Decision Issued:  January 15, 2014

The named insured requested a hearing to contest the nonrenewal of homeowners policy for a physical change rendering the property uninsurable, i.e. the furnace was no longer operating. The company submitted its eligibility guidelines and argued that homes with sole or primary wood heat are a violation of guidelines.

Held: For the insured. 24-A M.R.S.A. § 3051 allows nonrenewal for a reason that is in good faith and related to the insurability of the property, or based upon grounds for cancellation under section 3049. The company clearly relied upon 3049(5) as that statutory wording was quoted in the stated reason for nonrenewal. Section 3051 also requires the reason or reason to be explicit. Section 3054 states that a “statement from the insurer that the risk does not meet the insurer’s underwriting guidelines alone is not considered sufficient proof or evidence” of its relationship to insurability. The company did establish that the furnace in the home is no longer working, but focused on its issue with wood heat, which was not listed as the reason for nonrenewal, and relied upon underwriting guidelines relating to wood heat.


Last Updated: April 15, 2014