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Dana Desjardins v. Hingham Mutual Fire Insurance Company
Hearing #2005-15949, Decision Issued April 27, 2005.

The insured requested a hearing following receipt of a notice of cancellation of homeowners insurance alleging that fire damage to the home made the home ineligible for coverage. At hearing, the company argued that there is no longer any structure to insure, and it is standard procedure to cancel a policy after a total fire loss unless the home is rebuilt within 30 days following the loss. The insured maintained that he intends to rebuild the home but due to the home’s location in extreme northern Maine, he is unable to start construction until late spring.

Held: For the insured. The company clearly relies on § 3049(5) which states that a policy may be cancelled for “physical changes in the insured property that result in the property becoming uninsurable.” Although a physical change has occurred, the company has failed to demonstrate that the property is uninsurable as a result. The insured has indicted his intent to rebuild as soon as the ground has sufficiently thawed. The company issued a cancellation notice less than 3 weeks after the loss occurred, and it is unlikely that the Cancellation Control Act was intended to permit insurers to cancel a policy simply because the insured sustained a covered loss.

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