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Vincent & Linda Pestilli v. Concord General Mutual Insurance Company

Held May 9, 2013– Docket No. INS-13-2022
Decision Issued:  June 7, 2013

The named insured requested a hearing to contest the nonrenewal of a homeowners policy for an unknown business on premises that increased the liability hazard for injury, citing two specific exposures.  The company failed to demonstrate the existence of an unknown business on the premises.

Held: For the policyholder. 24-A M.R.S. § 3051 allows an insurer to nonrenew a policy for a reason that is in good faith and related to the insurability of the property. The reason or reasons in an insurer’s notice informing the insured of the nonrenewal must be explicit. At hearing, an insurer must provide evidence of its stated reason and then explain how it affects the insurability of the property. Concord specifically cited an unknown business on the premises, identifying two types of exposures. One exposure appeared in the declarations of the expiring policy, and was insured under the Permitted Occupancies endorsement for an additional premium charge, therefore it could not be considered an unknown business. The insurer also failed to establish the existence of the second exposure on the homeowners premises or how it affected the insurability of the property. Accordingly, the nonrenewal action was not upheld.

Last Updated: April 15, 2014