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Laura Paris-Tavares and Domingos Tavares v. MMG Insurance Company
Hearing #INS-06-2015, Decision Issued March 9, 2006.

The insured requested a hearing following receipt of a notice of automobile insurance coverage cancellation citing nonpayment of premium. At hearing, the company presented evidence of the billing and payment history on the policy as well as the post office certificate of mailing. The insured conceded that the initial check had been rejected and the next payment made to replace the downpayment was a partial payment. However, she stated that the company had not disclosed on its cancellation notice that payment by credit card could only be made during business hours. She argued that the company’s offer to reinstate if payment was made by the cancellation date did not clearly inform her of the limitations when payment could be made, and therefore was the cause of her non-payment.

Held: For the company. Title 24-A M.R.S.A. § 2914(1) permits an insurer to cancel a policy when the insured does not pay the full premium amount when due. In the present matter, the downpayment was due with the application received by the Company in early December 2005. When the check for the downpayment was not honored by the bank, the Company issued a cancellation notice which established a due date of January 5, 2006. The Insured made a partial payment which the company accepted with the assurance that the remainder would be forthcoming.

Another cancellation notice was subsequently issued as the balance remained unpaid, and the Company offered to rescind the cancellation if payment was received by February 5, 2006. The Insured was unable to make the payment as the billing office had closed for the day at the time of her call, on the last business day before the cancellation date. The law does not require the Company to provide the Insured with an additional opportunity to pay in order to avoid cancellation. The insured had failed to discharge the obligation due on January 5.The Company’s cancellation notice was received by the Insured after the premium due date thus meeting the requirement of § 2914(1). Based on the evidence presented at the hearing, the Superintendent hereby concludes that the Company has established adequate grounds for policy cancellation.

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