Maine law specifies how, when and why an insurer may cancel or non-renew an auto policy.
For any termination action, the insurer must send written notice to the named insured, and provide the correct amount of notice. Except for initial underwriting cancellations, as described in the Cancellation section below, the notice must include the reason and notice of the right to request a hearing.
Cancellation
When a policy is first written with an insurer, the insurer may cancel for any reason as long as you receive notice of cancellation before the 60th day of the policy. This is the initial underwriting period.
When the policy has been in effect for 60 days, or is a renewal policy, the insurer can only cancel for:
- Nonpayment of premium - at any time an insured does not pay the amount required by its due date, the insurer can cancel for nonpayment of premium.
- Fraud or material misrepresentation.
- Violation of terms or conditions of the policy.
- Suspension or revocation of a driver's license - revocation and certain suspensions that occur during the policy term, or within 180 days before the policy renewed, can be grounds for canceling the policy.
These grounds may also be used for non-renewal of a policy.
Nonpayment cancellation requires 10 days' notice before the cancellation date. All other reasons require at least 20 days' notice.
Non-Renewal
When a driver is convicted of specified violations or is involved in accidents during the 36 months prior to the expiration of the policy, there are several additional grounds in statute for which an insurer may decline to renew an auto policy, including:
- Operating under the influence
- Leaving the scene of an accident
- Speeding or reckless driving
- Operating after suspension
- Filing or attempting to file a false claim
- Two or more accidents with bodily injury, or damages exceeding $2,000
Hearings
When a policy is first written with an insurer, the insurer may cancel for any reason as long as you receive notice of cancellation before the 60th day of the policy. This is the initial underwriting period.
For all other termination actions, the insured may request a hearing before the Superintendent of Insurance to contest the reason for cancellation or nonrenewal. You must request the hearing within 30 days after you received the notice of cancellation or nonrenewal. The request must be received by the Bureau of Insurance during the hours that it is open.
For more information about hearings, please see our frequently asked questions.