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Nathan Moulton v. Hingham Mutual Insurance Company

Held October 27, 2009 – Docket No. INS-09-2118
Decision Issued: November 6, 2009

The insured requested a hearing to contest the nonrenewal of his homeowners policy for not being insured to value. The company argued that its underwriting guidelines require property to be insured to 80% of its replacement cost.

Held: For the insured. 24-A M.R.S.A. § 3054 states that an insurer’s sole reliance upon underwriting guidelines to support its action does not establish a relationship to insurability. In this particular circumstance, the coinsurance provision in the policy imposes financial consequences upon the insured in loss settlements when the property is not insured to value, with no evident negative affect upon the insurer.