Inheriting Property in Maine – Does the Estate’s Insurance Policy Protect Heirs?

2466829142_3c71a3e808_oMany clients ask us how to insure Maine property that they inherited. There are so many scenarios that it’s hard to generalize. Here are three we see often.

If Your Parents’ Property is Insured

When someone dies, their property in Maine becomes part of their estate. Most insurers will continue their Maine homeowners insurance or condo insurance until the policy expires. The insurance company wants to know who is looking after the property and protecting it from loss.

If the estate isn’t settled before the insurance policy expires, many insurers will refuse to renew. In that case, heirs must buy a new policy in the estate’s name, often with a surplus lines insurer. If the insured property is a vehicle, the Maine auto insurance company will ask where it is, if anyone is driving it, and what the plans are for the vehicle. They will make an underwriting decision accordingly.

If Your Parents’ Property is Not Insured

Too often, heirs or probate attorneys discover that one of the estate’s largest assets, the home, is uninsured. Insurance companies aren’t eager to insure previously uninsured properties. Homes without continuous insurance pose higher risks of damage. The policy may only be needed for a short time. Both scenarios are unattractive to insurance companies. Often a surplus lines insurer is the only available market.

If Probate is Cleared and You Have Inherited the Property

If you are the sole owner, simply insure it as you would your other property or autos. If you plan to use it as income property, you can buy a Dwelling Fire or business property insurance policy. If you intend to use it as a seasonal or secondary home, you can usually insure it on a personal policy.

Sometimes several members of the same family inherit property. Other times they create a trust to own inherited property. Some insurers will provide a personal policy in the name of a trust. If siblings inherit shared ownership, one buys a policy and includes the others as “additional insureds”. They all share the policy to protect their property interest and liability exposure.

Each Estate Situation is Different

Consult an attorney familiar with estate law, as well as your Maine insurance agent. Together, they will help you protect your interest and obligation in the property. If you want to insure property that you have inherited in Maine, contact a Noyes Hall & Allen Insurance agent in South Portland. We can help you evaluate your insurance options.

Does My Maine Homeowners and Auto Insurance Cover My College Student?

2542619678_07b45bfae6_2 This weekend, we move one of our kids back to college. He’s excited to re-join his friends and regain his independence that was suspended when he moved back home for the summer. We suppose that there’ll be some actual education taking place, too. It’s a big change for our family, not to mention our grocery bill.

So what does a Maine insurance agent do to his home insurance and car insurance policies when his kid goes off to school? This year: nothing. Next year may be different. Here’s why.

Home Insurance
Your Maine homeowners insurance covers you and “members of your household”. As long as he lives in a dorm and returns home every summer, he meets that definition – even though he’s over 18 and a legal adult. So, his computer, TV and other stuff are covered by our policy. Our liability coverage also follows him – which is handy given the behavior of 20 year-old males sometimes. 38457170_0a034cb1df_2

Next year, he might do a semester abroad. Would our homeowners policy cover him then? Yes, as long as he still is a resident of our household (i.e. lives at home on school breaks and vacations).

What if he rents an off-campus apartment next year? Well, that probably changes the rules. If his name is on a lease; if he stays year-round in the apartment; or if he no longer lives at home, then he’s not a member of our household. He needs to buy a renters’ insurance policy from a local independent agent. Cost: about $150 per year.

This fall, a new development in Portland called Bayside Village opens. They’ve been advertising on MTV, and set up a sales office next to a local pizza joint. It makes me wish I could go to college again! Bayside Village will house students from several local colleges. It offers access to public transportation and downtown Portland. Its furnished apartments include most utilities. It’s a lot like a dorm, but is unaffiliated with any school. Our advice for clients: don’t rely on your homeowners policy to protect you here – get a renters’ insurance quote.

Auto Insurance
Our son is not taking a car with him to school. Our insurer gives us an auto insurance discount (or draws a little less blood) for this. We don’t have to tell our insurer when he’s home for the summer or on break, and using one of our cars. Our Maine car insurance quote already presumes that he’s using our vehicles when he’s home.

Two of his roommates have cars at school. What if he’s successful in convincing us that he needs a car to “get a job”, “get an internship”, “come home for visits” or “get food”? Then, we have to tell our insurance company that he has a car at school. Adios discount, hola higher premiums!

What about that semester abroad? Would he be covered by our auto policy to drive a car in another country? Not on your life!

Keep in mind that your policies could certainly be different from mine. Contact your own Maine insurance agent with questions about how to best cover your situation.

Car Sharing and Insurance

Our last post talked about a new condo development proposed for downtown Portland, ME that featured shared cars for unit owners. Coincidentally, Joseph White’s column in today’s Wall St. Journal discusses the growing appeal of car-sharing services like Zipcar. Essentially, it works like this: you pay a membership fee to join a service, which gives you access to several vehicles parked in various locations around larger cities. You reserve a car, pick it up at the designated spot, and pay only for the time, tolls and parking when you use it.

I’ve seen Zipcars in several major cities, and even a few in Maine (probably Boston folks escaping the city for the weekend), and some of them put my ride to shame. They have everything from Mini Coopers to minivans, SUVs to BMWs. The concept makes sense for non-car-owning city dwellers who need access to a good vehicle periodically.

Sharing ownership of anything doesn’t always come naturally to many Americans. We tend to be picky about our “stuff” – especially our cars. What if the last driver left the car a mess? Or low on fuel? Or in the wrong lot? Who maintains the vehicles? Of course, the car-sharing services address these and other issues.

What about insurance? In our agency, we haven’t actually seen a car-sharing contract, or been asked by our clients yet. However, our understanding is that at least one car-sharing company buys a blanket auto policy providing $300,000 liability coverage (much lower limits for those under 21), and assesses a $500 fee for damage you cause in an at-fault accident. Presumably, a condo association would buy similar coverage. Most insurers would be reluctant to insure lots of different unrelated drivers; they would probably charge more as a result. And, what if one of the condo unit owners was a poor driver? Would the other drivers have to pay more money for their exposure?

Another issue: many individuals have assets higher than $300,000. And Maine’s Wrongful Death Statute allows up to $500,000 in damages per person, PLUS punitive damages. Many members, if they don’t own other vehicles, may have no auto coverage of their own. They would be out of luck if an accident exhausted the $300,000 limit, and would be responsible for the remainder of the damages “out of pocket”.

Possible solutions: One could buy a “named non-owner” policy, or a personal umbrella policy. How the latter would respond to a “shared car” situation is an interesting question that has (to our knowledge) not been presented.

Sometimes, societal changes happen faster than the insurance industry can react, but the industry’s mission is to help the public manage risk. Car sharing services are gaining in popularity. It’s a matter of time before personal auto insurers develop procedures for addressing the exposures they present. We suggest that you confer with your agent if you are thinking about joining a service.

New Urbanism in Portland Maine? Micro-housing, Carsharing and Other Trends

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A Portland developer hopes to cash in on the current appeal of chic city housing, with an innovative proposal for the corner of High and Danforth Streets. The building would contain 26 “micro units” – each 450 to 800 square feet – with shared lounges, laundry, and even guest rooms. One of the most intriguing features of the project is the concept of the condo owners sharing use of commonly-owned vehicles.

Publications as diverse as the Wall Street Journal and The Atlantic Monthly have noted the trend to “downsize” housing from the suburban McMansions that were built in the past 15 years to smaller spaces closer to town. The movement has been dubbed “micro-housing” by some, the “not so big house” by others.

Nudged by recent increases in home heating and gasoline costs, along with smaller household sizes as the Baby Boomer population pig pushes through the demographic python, many Americans are looking to downsize, and lots are looking to move closer to cities’ amenities, health care facilities and social life.

Which brings us back to the northeast corner of High and Danforth Streets in Portland, Maine.

Looking at this lot, it’s hard to imagine how one could squeeze 26 condo units (and the residents’ cars) onto it. The short answer is, it’s impossible, without thinking differently. Picture a building owned by an association of 20-somethings who may be buying their first real estate, and work within walking distance; older singles (50-60) attracted to downtown amenities; and out-of-towners seeking a Portland pied-à-terre. Imagine only 14 parking spaces under the building for those 26 units, two of which are for shared vehicles.

Green types applaud the project’s low-impact, pedestrian-centric design. Affordable housing fans like the promise of home ownership for those who might otherwise be shut out. New urbanists like the community orientation and the opportunity for people to walk to work, and “third places”. For developers, it allows maximum profit from a minimum parcel. And, because of the small sizes of the units, municipalities have considered variances to normal parking requirements.

For some people, this is a great idea. But it does pose some practical issues, not the least of which is how to insure them. More about that in our next post.

Questions about Maine condo insurance, homeowners insurance or Maine business property insurance? Want to get an insurance quote on your property? Contact Noyes Hall & Allen Insurance at 207-799-5541.

A long, wet summer

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Maine has weathered one of our wettest summers in 20 years. Several storms have dumped more than an inch of rain each, causing flash flooding in various locations, washing out roads, and causing traffic accidents and property damage. This follows one of our snowiest winters, which caused massive flooding in northern Aroostook County

Unfortunately, many people find out the hard way that Maine homeowners insurance, business property insurance and condo insurance policies  do not cover flood damage. The only provider for flood coverage in the U.S. is The National Flood Insurance Program (NFIP). The product is sold by nearly every Maine insurance agency.

As many Mainers learned this summer, you don’t have to live next to a body of water to suffer from flooding. NFIP says that 25% of flood claims come from “low to moderate risk areas.” Take a look at this video taken on Stevens Avenue in Portland taken earlier this month.
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Keep in mind that Stevens runs along a plain that sits 100’ above sea level, and miles from a body of water.

For those in special hazard zones, flood coverage can be expensive – often more than homeowners policies. Lenders usually require homeowners to purchase this coverage. Outside of these special hazard zones, the cost of flood coverage is much less – often as little as $200 per year.

For more information, contact your agent at Noyes Hall & Allen Insurance at 207-799-5541.

Alternative Heat: Burning Wood

Rising heating oil prices have Mainers thinking about the cold of winter in the middle of summer. Firewood supplies are scarce, and prices high, the newspaper reported last week. Consumer advocates are warning about unscrupulous dealers and unsafe wood-burning practices. Even Gov. John Baldacci is using his bully pulpit to spread the word.

Maine insurance agents and companies have been concerned for a few years about the prospect of paying more Maine homeowners insurance claims due to fires caused by inexperienced woodstove operators. Presque Isle’s MMG Insurance has some of the best material, from a two-page brochure (pdf) to a 13 page manifesto (available upon request).

If you’re thinking of burning wood, check them out.

How to Get Golf Cart Insurance in Maine

Higher fuel prices continue to inspire Americans to find another way to get from here to there. An Associated Press report in last week’s Press Herald talks about the growing use of golf carts as alternative transportation. Increased golf cart use has led to a corresponding increase in emergency room visits -12,000 a year – as energy-sipping buggies brave public roads with their larger, faster cousins.

Several Maine jurisdictions, including Chebeague Island, have passed ordinances allowing use of golf carts on some public roads, subject to restrictions. Some of our clients who live in these communities have been required to provide evidence of liability insurance in order to use their golf carts on local roads.

If it’s licensed for use on public roads, Maine Law requires the owner of any vehicle subject to registration for use on public roads to purchase liability insurance. Just one problem: homeowners policies only cover golf carts being used on your land, or when you’re actually playing golf (on a golf course!); and you can’t add a golf cart to a standard auto policy. What’s a frugal consumer to do?

Some insurers have introduced special policies, similar to motorcycle policies, for Maine golf cart insurance. They provide the liability and uninsured motorist coverage that are required by Maine Law. There have been some reports of agents issuing insurance ID cards for carts without the proper coverage. Make sure that you have a policy specifically listing your golf cart, and specifying that it covers use on public roads. Otherwise, if you become one of the 12,000, you might find your trip to the ER is even more expensive than you thought.

For more information from a Maine insurance agency about insuring a Maine golf cart, contact Noyes Hall & Allen Insurance at 207-799-5541.