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Raymond Dennison v. Phenix Mutual Fire Insurance Company

Held July 18, 2012, 2012– Docket No. INS-12-2059
Decision Issued:  August 7, 2012

The policyholder requested a hearing to contest the company’s cancellation of his homeowners policy for nonpayment of premium. The record established that the coverage limit effective at the renewal of the policy had been increased as the property had previously not been insured to value. The insured did not pay as he objected to the increase.

Held: For the company. Maine law under 24-A M.R.S.A. § 3059 allows an insurer to increase the value at renewal if 30 days’ notice of the increase is given to the insured, and other requirements of that statute are met. The company complied with this statute; therefore the subsequent renewal billing for the increased Coverage A value was proper. The Maine Property Insurance Cancellation Control Act at § 3049(1) allows an insurer to cancel a policy if an insured fails to make a premium payment when due. The company demonstrated that the named insured was notified of the payment due prior to the due date, and no payment was received. A cancellation notice was properly issued to the named insured at the last known address and payment was not received before the cancellation date. Accordingly, the cancellation action is permitted.