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Americo & Susan Andrade v. Hanover Insurance Company

Held April 11, 2012 and April 25, 2012– Docket No. INS-12-2022
Decision Issued:  May 18, 2012

The named insured requested a hearing to contest the cancellation of homeowners insurance coverage for negligent acts by the insured that increase the hazards insured against, specifically leaving the property unattended and at risk for additional loss. 

Held: For the insured. 24-A M.R.S.A. § 3049 allows cancellation under section 4(A) for discovery of a negligent act or omission by the insured that substantially increases any hazard insured against. The company attempted to establish that the insured’s failure to maintain custodial care of a seasonal residence, resulting in damages relating to break-in, vandalism and theft, was a negligent act triggering section 4. Hanover’s policy contract, however, does not allow cancellation for the statutory reason provided in section 4; instead, it requires a “grossly negligent” act or omission, which requires a greater showing of negligence beyond mere lack of due care. An insurer may give its policyholder more protection than the statute allows—that is, make it harder for the insurer to cancel the policy—but if it does so it must meet the higher standard that it has set for itself.  It may not rely on the statutory language in a cancellation action.  The company failed to establish that the circumstances met the standard required by the policy.

Last Updated: April 15, 2014