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Alan and Stefanie Berry v. Union Mutual Fire Insurance Company

Held July 31, 2012 – Docket No. INS-12-2060
Decision Issued:  August 24, 2012

The named insured requested a hearing to contest the nonrenewal of their homeowners policy due to the likelihood of future losses due to the characteristics of the mold losses that had occurred. The company failed to establish that mold losses had occurred and also raised an additional reason that was not given in the notice of nonrenewal.

Held: For the insured. 24-A M.R.S. § 3051 allows nonrenewal if based upon a reason that is in good faith and related to the insurability of the property, and requires the reason or reasons given to the insured to be explicit. Further, reliance upon “loss record” alone as justification for nonrenewal is not permitted. A company must demonstrate a nexus or pattern to illustrate that the cause or nature of the past claims is such that similar or continued future claims are likely. As the company failed to support its stated reason, and raised an additional reason that could not be considered, the nonrenewal action was not permitted.

Last Updated: April 15, 2014