It's not fair but believe it or not it is legal.
Generally your policy will have language in it that discusses fires that may be preventable.
Sounds like you were a good customer so you may want to talk with your insurance agent for a reconsideration. If the agent writes alot of policies and has a good relationship with your carrier, he/she may be able to keep you covered.
There is plenty of competition out there so you will get coverage. However, be prepared to spend more money for the same coverage.
You could always file a complaint with the state commissioner but that is a long and time consuming process.
Hope the above helps and good luck