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Daniel Harris v. York Insurance Company of Maine

Held July 26, 2012 – Docket No. INS-12-2063
Decision Issued:  August 23, 2012

The named insured requested a hearing to contest the cancellation of the homeowners policy covering a secondary home for a physical change resulting in the property becoming uninsurable, and negligent acts by the insured increasing the exposure to loss.  The company failed to substantiate the reasons for cancellation.

Held: For the insured. 24-A M.R.S. § 3049(A) allows cancellation for the discovery of negligent acts or omissions by the insured that substantially increase the hazards insured against; section 3049(5)  for physical change in the insured property that results in the property becoming uninsurable. The company based its first reason upon an alleged statement made by the insured that the company failed to substantiate. Although the fire loss that had occurred was a physical risk, the company cancelled the policy shortly after the loss, not allowing a reasonable time for it to be rebuilt. The company failed to explain how the property is uninsurable as a result of that loss. It is unlikely that the Cancellation Control Act intended to permit insurers to cancel a policy as soon as a loss has occurred.

Last Updated: April 15, 2014