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Michael Lessard v. Bristol West Insurance Company
Docket No. INS-07-2070, Decision Issued August 8, 2007

The insured requested a hearing following receipt of a notice of cancellation of automobile insurance coverage citing nonpayment of premium as the reason for cancellation. At hearing, the company testified as to the payment and billing history and the changes made to the policy. The insured maintained that the company’s premium calculations were incorrect.

Held: For the company. Under 24-A M.R.S.A. § 2914(1), an insurer may cancel a policy for nonpayment of premium, which is defined by § 2912(3) as the “failure of the named insured to discharge when due any of his obligations in connection with the payment of premium on the policy, or any installment of a premium...”

A review of the endorsements clearly demonstrates that premium changes did not affect previously billed installments; they were divided between the remaining future installments. The installment at issue was properly billed and the insured did not remit payment in full. The company issued a subsequent bill for the remaining amount and no payment was received. The insured failed to “discharge when due” his obligation “in connection with the payment of premium on the policy, or any installment of a premium.” 24-A M.R.S.A. § 2912(3). The cancellation notice was received after the premium due date as required by § 2914(1). The company further provided the insured with adequate notice of the action in accordance with § 2915. Although not required, the company offered the insured the opportunity to negate the cancellation action by remitting payment by the cancellation date. The insured did not make the required payment. Accordingly, cancellation of this policy is permitted.