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Elmer & Gwendolyn Smallwood v. Hartford Underwriters Insurance Company
Docket No. INS-13-2035
Decision Issued: June 24, 2013
The insured requested a hearing following receipt of a notice of homeowners insurance nonrenewal citing changes in the property resulting in it becoming uninsurable, specifying the named insured no longer occupies the dwelling as the reason for nonrenewal. At hearing, the company maintained that the named insured no longer occupies the dwelling, therefore it is not eligible for a homeowners policy.
Held: For the insureds. The Maine Property Insurance Cancellation Control Act permits nonrenewal of a policy for a reason that is “a good faith reason and related to the insurability of the property or a cancellation ground pursuant to section 3049.” 24-A M.R.S.A. § 3054. Section 3054 further 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.” The company cites the change in occupancy as a physical change, and is relying solely upon the inability of the dwelling to meet underwriting requirements as its basis for nonrenewal. It failed to explain how the occupancy of the dwelling by someone other than the named insured is related to insurability. In addition, the company failed to explain why the “Lifetime Continuation Agreement” provision of the policy would not be applicable. Accordingly, approval for this nonrenewal action is denied.