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Robert & Deborah Fredette v. Concord General Mutual Insurance Company
Hearing #2005-15943, Decision Issued May 16, 2005.

The insured requested a hearing following receipt of a notice of homeowners insurance policy nonrenewal citing a failure to comply with loss control recommendations regarding two conditions of the property. At hearing, the company maintained that the insureds were constructing an addition and that construction had stopped for an indefinite period of time. It argued that the incomplete construction as well as other property conditions increased the potential for damage and structural deterioration. The insured testified that the addition is solidly capped off and protected against leakage.

Held: For the insureds. Although the company presented an argument relating the status of the construction and other conditions to the insurability of the property, the reason for nonrenewal is the failure to comply with reasonable loss control recommendations. 24-A M.R.S.A. § 3051 requires the nonrenewal reason to be explicit. Accordingly, it is only the failure to comply with reasonable loss control recommendations with respect to the issues cited in the company’s notice that governs its ability to nonrenew the policy. In order to prevail, the company must provide evidence that the cited loss control recommendations were clearly conveyed to the insureds as required loss control measures. In the present case, although the company sent a letter about the conditions to the agent and the agent discussed the issues with the insureds, it is unclear whether the agent communicated the issues to the insureds as required loss control measures. Accordingly, it cannot be established that the company has met the requirements of 24-A M.R.S.A. § 3049(10). Alternatively, in light of that lack of evidence, the company has not demonstrated that its stated reason for nonrenewal constitutes a good faith reason related to the insurability of the property.

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