Driving without insurance is a violation of the law, and it also exposes you to several significant risks. You may be unable to pay the full cost of your medical expenses or the repairs to your vehicle if an uninsured driver hits you. You might also be held accountable and go bankrupt or even to jail if the accident results in significant injuries or deaths. Noyes Hall & Allen Insurance in Portland, ME can help with expert advice!
Implications of Driving Without Insurance
If you’re caught on the road without auto insurance, there are chances you’ll be fined and your license revoked. Also, you’re at the risk of being sued for damages, which is the worst-case scenario. If you are financing a car and do not have insurance, your lender may start repossession proceedings. Many people do not know when their car insurance policy may not cover them if they drive someone else’s car.
Driving without insurance is against the law and can result in a traffic ticket, fines, and a policy cancellation if you have private insurance. Uninsured driving also increases your risk of being involved in an accident, and if you do have an accident, being uninsured will not cover any damages or medical expenses. Your license could also be suspended. If you cause an accident and don’t have insurance, you could be held personally liable for any damages. You pay the repair and medical bills from your pocket.
The consequences of not having insurance can be catastrophic: fines, license revocations, and even jail time in extreme cases. Even if you have a car not currently insured due to expired tags, you may be liable for any accident it causes. For guidance in Portland, ME, call Noyes Hall & Allen Insurance.
Maine insurance rates are some of the lowest in the US. But home and auto rates are up as insurers struggle with rising claim costs and rising construction values. Fortunately, Maine insurance buyers are seeing smaller rate increases than much of the country.
Maine Auto Insurance Rates
As of June 2022, Maine auto insurance rates are averaging a 1.7% increase at renewal. That’s considerably less than the national average of 4.3%. The Wall Street Journal recently reported increases as high as 20%.
The main factors driving auto insurance increases include:
More driving. Miles driven are returning to near pre-pandemic levels
More serious crashes. Traffic fatalities reached a 16-year high last year.
Higher repair costs. Parts and labor costs have both risen sharply due to staffing issues, shipping problems and supply chain glitches.
Higher used car prices. When insurance companies total a vehicle, they have to pay the current used car market price. Used car prices went through the roof recently.
Car rental issues. Auto body repair times are much longer. That means longer replacement rentals. Daily car rental costs have spiked, too.
Maine Home Insurance Rates
Maine home insurance rates are rising faster than auto premiums, at a 4.1% clip. That’s still less than the 6% national average. And at an average premium of $1005 per year, Maine home insurance is a relative bargain.
Home insurance costs are affected by building values and claim costs.
Rebuilding costs. Building materials and labor costs spiked during the pandemic. Insurance companies have increased their “inflation guard” factors to provide increased coverage on renewals.
Longer repair times. Contractors are hard to find, too, which increases additional living expenses.
Every insurance company files their rating plan with the Maine Bureau of Insurance. That plan includes individual rating factors such as driving record, insurance claim history, property location and personal insurance scores.
Market value and building cost are important factors for property owners. But only one really matters when buying insurance. Knowing which one can help you avoid buying too much – or too little – insurance.
Market Value and Building Costs – Both are High
Market values of real estate are at an all-time high. That’s no secret to anyone buying or selling property. Whether you believe we’re in a bubble or not, 2022 is clearly a seller’s market. Due to low supply and high demand, buyers are offering above asking price and making other concessions to get properties.
Building costs are also high in 2022. Although lumber prices are lower after a huge COVID spike, they remain at a historically high level. So do contractors’ labor rates. Prices for petroleum-based building materials are also sky high.
Market Value – What is It?
Simply put, real estate market value is the going price. The one a willing buyer and seller agree upon. Many factors go into market price. Among them:
Location (location, location)
Inventory of similar properties for sale
Features of the buildings
Landscaping and other improvements
Building Cost vs. Reconstruction Cost
Building cost is different from market value. It’s also different from reconstruction cost.
Building cost includes:
Building materials (“sticks and bricks”)
Design or architectural work
Contractor labor and use of equipment
Reconstruction cost per square foot is often higher than building new. Some reasons for that include:
Constraints of working around existing landscaping and structures
Matching existing materials, design, etc.
Reduced economies of scale. Contractors often build several new homes at a time. This distributes the cost of equipment, materials and labor. A reconstruction job at one home doesn’t permit this kind of scale.
Insurance Doesn’t Cover Market Value
Market value includes land, earth moving, landscaping and hardscape. Insurance doesn’t pay for any of those things. Market value also includes outbuildings, fences, pools and other structures. Insurance lists those separately from main buildings.
Insurance Covers Reconstruction Cost
Insurance covers the cost to rebuild. Even after a complete disaster, a contractor may be able to use the excavation or foundation that remains. That’s why in highly desirable areas, insurance values are often less than the price you would pay to buy the property.
Can A Lender Make You Insure the Purchase Price?
Lenders are always concerned about protecting their interest in your property. But your building insurance amount may not match your loan amount. That’s OK.
An insurance agent should work with you to estimate the proper rebuilding cost of your property. They should also provide proof of insurance to your lender. Finally, they should advocate on your behalf if the lender pushes for insurance above the fair rebuilding cost.
Do you need to insure property in Southern Maine? Whether it’s in Greater Portland, Cape Elizabeth, Scarborough or anywhere in Cumberland, Androscoggin, Sagadahoc or York County, contact Noyes Hall & Allen Insurance in South Portland or call 207-799-5541.
We offer a choice of many insurance companies so we can help you find the best value. We’re independent and committed to you.
From Ferry Village to Highland Avenue and Brick Hill to Meeting House Hill, Noyes Hall & Allen Insurance has helped South Portland residents and businesses protect their properties since 1933.
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