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Keith Broomhall v. Hingham Mutual Fire Insurance Company
Hearing #2005-15990, Decision Issued May 9, 2005.

The insured requested a hearing following receipt of a notice of homeowners insurance coverage nonrenewal citing company underwriting guidelines and the insured’s claim history as the reason for nonrenewal. At hearing, the company presented evidence of two water damage claims and alleged that one similar claim had been submitted to a prior insurer. The company further maintained that the exposure does not comply with its underwriting guidelines.

Held: For the insured. Section 3051 specifically states that “loss record” by itself is not an acceptable reason for nonrenewal. A company must demonstrate a nexus or pattern to illustrate that the cause or nature of the past claims is such that similar or continued future claims are likely. Although the company alleges a history of water damage claims, there is insufficient evidence to demonstrate that any of the identified claims are causally related. There is also insufficient evidence to conclude that the claim submitted to a prior insurer involved the same property. In addition, section 3054 specifically 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 a good faith reason related to the insurability of the property. Finally, although in its testimony, the company alludes to misrepresentation by the insured in his application for insurance, it is not stated as a reason for nonrenewal and therefore, may not be considered grounds for nonrenewal of the subject policy.

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