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Brandy Lilly v. State Farm Mutual Automobile Insurance Company

Held August 21, 2013 – Docket No. INS-13-2076
Decision Issued:  August 30, 2013

The named insured requested a hearing to contest the cancellation of two automobile policies because of the driver’s license suspension of a listed driver.  The company established a suspension meeting cancellation requirements applicable to one of the two policies.

Held: For the company regarding the policy covering the vehicle principally driven by the operator with the license suspension. 24-A M.R.S. § 2914(4) permits cancellation of an auto policy if the license of the named insured or other operator who either resides in the household or customarily operates a vehicle insured under the policy becomes suspended during the policy term, or within 180 days prior to its last renewal effective date. The contract wording is slightly different, allowing cancellation if the license suspension is the named insured’s, a resident relative’s or of any other person who usually drives the car insured under the policy. The license suspension cited by the company met the grounds for cancellation only as applicable to the policy covering the vehicle principally operated by that driver. As the company failed to establish that the driver with the suspension is a resident of the household or a relative of the named insured as defined in the policy, the cancellation of the other policy, covering the vehicle for which the named insured was identified as the principal driver, was not permitted.

Last Updated: April 15, 2014