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Kenneth and Candice Spalding v. MMG Insurance Company

Held August 14, 2012– Docket No. INS-12-2073
Decision Issued:  August 31, 2012

The named insured requested a hearing to contest the nonrenewal of homeowners policy for a business on premises that was not covered by commercial insurance by MMG.  The company demonstrated that the business policy it previously provided had cancelled, leaving the homeowners policy at risk for claims arising from the business.

Held: For the company. 24-A M.R.S. § 3051 allows nonrenewal for a reason that is in good faith and related to the insurability of the property. The company established that the duty to defend the policyholder against any liability claims supersedes the applicable exclusion pertaining to the business, and that the company could incur defense costs even if the damages of a claim arising from the business exposure is not covered by the policy.

Last Updated: April 15, 2014