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Michael Young v. Metropolitan Property & Casualty Insurance Company

Held May 7, 2008 - Docket No. INS-08-2044
Decision Issued: May 13, 2008

The insured requested a hearing regarding the nonrenewal of his homeowners policy due to the dwelling being a mobile home. Metropolitan argued that the dwelling type is not eligible for coverage under this homeowners form, although the company had insured the dwelling for many years.

Held: For the insured. The Maine Property Insurance Cancellation Control Act permits nonrenewal of a policy for a reason that is “a good faith reason and related to the insurability of the property or a cancellation ground pursuant to section 3049.” 24-A M.R.S.A. § 3054. Section 3054 further 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.” The company testified that the property is not eligible for coverage under a homeowners policy because it is a mobile home. A company’s eligibility requirements for a policy is analogous to underwriting guidelines, therefore, they are insufficient to prove that the insurer’s reason is a good faith reason related to the insurability of the property. The company failed to identify any factor that would support the action. Accordingly, nonrenewal of the policy for the cited reason is not permitted.