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Margaret Erwin v. Concord General Mutual Insurance Company
Docket No. INS-06-2049, Decision Issued May 25, 2006.

The insured requested a hearing following receipt of a notice of homeowners insurance nonrenewal citing a negligent act or omission by the insured as the reason for nonrenewal. At hearing, the company argued that the insured’s failure to act led to a claim. The insured maintained that she was not at fault.

Held: For the insured. The applicable statute, 24-A M.R.S.A. § 3051, provides that the “reason for nonrenewal must be a good faith reason and related to the insurability of the property or a ground for cancellation pursuant to section 3049.” Section 3049(4)(A) permits an insurer to cancel a policy upon the discovery of negligent acts or omissions by the insured substantially increasing any of the hazards insured against.
The company alleged that the claim was due to the insured’s negligence. Although the company submitted two pages of claim notes from a lengthy claim log, it did not offer evidence of an adjuster’s report or statement. It appears that the company based its conclusion upon statements obtained from the third party claimant and did not independently determine the veracity of the claim. The evidence indicates a possible ulterior motive on the part of the third party claimant, and the company provided no independent verification of the allegations. Accordingly, the company has not established the requirements to nonrenew this policy.

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