An Act To Extend Insurance Notification and Protection to Small Businesses and Farms
Maine Legislature, Session 122, LD 1192
Committee: Insurance and Financial Services
Sponsors: WEBSTER, EDMONDS, MA YO, BRAUTIGAM, CUMMINGS, PERRY, RICHARDSON, SMITH, MILLS
Amends: 24-A MRSA §3048, 24-A MRSA §3051, 24-A MRSA §3060

Legislative Document 
No. 1192 
H.P.821 
House of Representatives, March 8, 2005 
An Act To Extend Insurance Notification and Protection to Small 
Businesses and Farms 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative WEBSTER of Freeport. 
/J'l~ 1I7.17ldC~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by President EDMONDS of Cumberland, Senator MA YO of Sagadahoc and 
Representatives: BRAUTIGAM of Falmouth, CUMMINGS of Portland, MARRACII:E of 
Waterville, PERRY of Calais, Speaker RICHARDSON of Brunswick, SMITH of Monmouth, 
Senator: MILLS of Somerset. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §3048. sub-§§I. 2 and 3, as enacted by PL 
1973, c. 239, are repealed and the following enacted in their 
place: 
1. 
Real property. 
Loss of or damage to real property; 
2. 
Personal property. 
Loss 
of 
or 
damage 
to 
personal 
property; and 
3. 
Inju~ to persons or property. 
Legal liability for loss 
of. damage to or injury to persons or property. 
Sec. 2. 24-A MRSA §3051, 2nd" as amended by PL 2003, c. 671, 
Pt. A, §8, is further amended to read: 
The reason or reasons for the intended nonrenewal action 
must accompany the notice of intent not to renew and the reason 
or reasons must be explicit. Explanations such as "underwriting 
reasons," "underwriting experience," "loss record," "location of 
risk," "credit report" and similar insurance terms are not by 
themselves 
acceptable 
explanations 
of 
an 
insurer's 
intended 
nonrenewal of a policy insuring property of the kind defined in 
section 3048. 
If the intended nonrenewal is based in whole or in 
part on the reason that repairs are necessary to maintain the 
insurability of the property, then the policy may be nonrenewed 
in accordance with this subchapter only if prior to issuing the 
notice of intent not to 
renew the insurer has provided the 
insured with a detailed written explanation of the necessary 
repairs, the insurer has permitted a minimum of 4 months for the 
insured to complete the repairs and the insured has failed to 
complete the repairs. 
The reason for nonrenewal must be a good 
faith reason and related to the insurability of the property or a 
ground for cancellation pursuant to section 3049. 
Sec. 3. 24-A MRSA §3060 is enacted to read: 
§3060. 
Coinsurance clauses in policies 
If an insurance policy subject to this subchapter includes a 
coinsurance 
clause 
that 
relates 
to 
the 
amount 
of 
coverage 
provided for the value of eguipment or property covered under the 
policy in the event of a loss or claim, the insurer shall make 
written disclosure to the policyholder clearly explaining the 
coinsurance 
clause 
and 
indicating 
which 
types 
of 
coverage 
available 
under 
the 
policy 
are 
subject 
to 
the 
coinsurance 
clause. 
The insurer must include in the explanation a numeric 
example illustrating the operation of the coinsurance clause. 
The disclosure must be signed by the policyholder at the time a 
policy is issued. 
SUMMARY 
This bill does the following. 
1. 
It brings commercial property insurance contracts under 
the property insurance cancellation control laws so that business 
owners 
may 
appeal 
nonrenewal decisions 
to 
the Department of 
Professional 
and 
Financial 
Regulation, 
Bureau 
of 
Insurance. 
Current law extends the right of appeal to a business owner only 
when an insurer cancels a property insurance policy in the middle 
of its term. 
2. 
It requires an insurer to provide advance notice of 
needed property repairs to a policyholder and to allow for a 
minimum of 4 months for the policyholder to complete the repairs 
before issuing a nonrenewal notice based on lack of necessary 
repairs for a property insurance policy subject to the property 
insurance cancellation control laws. 
3. 
It requires insurers who include a coinsurance clause in 
property 
insurance 
contracts 
to 
make 
written disclosures 
to 
policyholders that include numeric examples explaining how the 
coinsurance clause applies to the amount of coverage provided for 
equipment or property insured under the contract in the event of 
a claim.