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Brandon Lavigne v. Sentinel Insurance Company LTD

Held February 11, 2009 – Docket No. INS-09-2006
Decision Issued: February 11, 2009

The insured requested a hearing following receipt of a notice of automobile insurance coverage cancellation citing nonpayment of premium. At hearing, the company demonstrated that a scheduled electronic funds transfer (EFT) payment was rejected for insufficient funds, and as a result the cancellation notice was issued.

Held: For the company. The Maine Automobile Cancellation Control Act allows an insurer to cancel a policy if an insured fails to make a premium payment when due. See 24-A M.R.S.A. §§ 2914(1), 2912(3). The company demonstrated that a scheduled EFT payment was rejected by the insured’s bank, thus payment was not made when due. A cancellation notice was properly issued after the premium due date. The company has demonstrated that the statutory requirements to cancel the policy have been met.