CANCELLATION OR NONRENEWAL OF PERSONAL AUTOMOBILE AND PROPERTY INSURANCE : Brochures : Bureau of Insurance

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CANCELLATION OR NONRENEWAL OF PERSONAL AUTOMOBILE AND PROPERTY INSURANCE

Published by the Maine Bureau of Insurance

CANCELLATION AND NONRENEWAL OF PERSONAL AUTOMOBILE AND PROPERTY INSURANCE

The Maine Automobile Insurance Cancellation Control Act and the Maine Property Insurance Cancellation Control Act were enacted to protect policyholders. These laws set rules under which an insurance company may cancel or nonrenew certain personal automobile, property, and liability insurance policies.

Cancellation is the termination of a policy at some point between the effective date of the policy and its anniversary date.

Nonrenewal is when an insurance company decides that it will not issue another policy after the anniversary date of the current policy.

Initial Underwriting Period - In the case of an application for a new policy, the insurance company can cancel within the initial underwriting period if a review of your application shows that you do not meet the company’s current requirements. The insurance company must issue a written notice of cancellation to reach you before the policy is 60 days old for an automobile policy and before the policy is 90 days old for a homeowners or dwelling policy. If the policy covers a seasonal dwelling, the time period is 120 days.

After the initial underwriting period has passed, (either 60, 90, or 120 days) an insurance company may cancel for only one of the reasons listed in the law. Some of these reasons are: nonpayment of premium, suspension of license, fraud, material misrepresentation, failure to comply with loss control recommendations, failure to properly fence a swimming pool or remove a trampoline, and physical changes in the property making it uninsurable.

The Maine Automobile Insurance Cancellation Control Act allows nonrenewal of a policy for specific motor vehicle convictions or accidents, or for a reason for which the policy could be cancelled.

Some of the reasons for nonrenewal are:

three speeding convictions in the prior three years,

conviction of operating under the influence during the prior three years,

conviction of operating after the license has been suspended or revoked,

One driver having two or more accidents in the prior three years that results in bodily injury or property damage in excess of $1,000 - or- the total number of accidents of all drivers (with bodily injury or property damage in excess of $1,000 for each accident) that exceeds the number of vehicles that are insured in the household by the same insurer.

Accidents where your vehicle was hit from the rear or was hit while parked do not count, nor do those accidents in which the operator of another vehicle was convicted of contributing to the accident or those accidents in which you have been reimbursed by or have a judgment against a person who is responsible for the accident.

The Maine Property Insurance Cancellation Control Act states that the reason for nonrenewal of property insurance must be a good faith reason and related to the insurability of the property, or an allowed reason for cancellation.

In the case of nonrenewal of a policy, the insurance company must give you notice in writing at least 30 days before the expiration date that the company does not intend to renew your policy.

For a policy cancellation, the insurance company must give you at least 20 days written notice, except if the cancellation is for nonpayment of premium, then only 10 days notice is required.

The notice period begins the day after you receive the notice or when it is deemed by law to have been received. Maine law deems the insurance company's notice to be received by you on the:

fifth calendar day after the cancellation notice was mailed by the insurance company and the

third calendar day after the nonrenewal notice was mailed by the insurance company.

Can I Appeal a Cancellation or Nonrenewal?

If you want to appeal an insurance company’s cancellation or nonrenewal of a policy covered under either the personal automobile or property laws, you may request a hearing by writing to:

Superintendent of Insurance
Bureau of Insurance
34 State House Station
Augusta ME 04333

A copy of the cancellation or nonrenewal notice must be sent with your request. You must request a hearing within 30 days of your receipt of the insurance company’s notice.

NOTE: The Cancellation Control Acts do not give you the right to request a hearing if the insurance company issues a notice of cancellation during the initial underwriting period (either 60, 90, or 120 days depending on the type of policy involved.

Other publications are available through the
Bureau of Insurance
34 State House Station
Augusta ME 04333
(207) 624-8475
(800) 300-5000

or visit our web site at:
www.maine.gov/insurance

Printed Under Appropriation No 014-02A-3041-012
May 2005

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