Cancellation means that the insurer is terminating your policy at some time between its effective date and its anniversary date.
Nonrenewal means that the insurer will not continue your policy after the anniversary date of your current policy.
An insurer may cancel a commercial policy for one or more of the following reasons:
- Nonpayment of premium;
- Fraud or material misrepresentation made in obtaining the policy, continuing the policy, or presenting a claim under the policy;
- Substantial change in the risk which increases the risk of loss;
- Failure to comply with the insurer’s reasonable loss control recommendations;
- Substantial breach of contractual duties, conditions or warranties;
- Determination by the Superintendent that continuation of the class of business will jeopardize the insurer’s solvency or place the insurer in violation of the insurance laws.
If the policy has been in effect for 60 days or more when the insurer mails or otherwise delivers a cancellation notice, you may request a hearing before the Superintendent. You can do so by sending a written request to the Bureau of Insurance by mail or by fax, or by calling us at 207-624-8475. You must request the hearing within 45 days of receiving the notice.
The limited cancellation reasons do not apply, and there is no right to a hearing, if the policy has been in effect for less than 60 days when the insurer mails or otherwise delivers a cancellation notice, unless the policy is a renewal of a prior policy with that insurer.
An insurer may nonrenew a commercial policy for any reason after giving at least 30 days’ notice before the expiration date of the policy. There is no right to a hearing if the policy has been nonrenewed.