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Avoiding 4 Big Car Insurance Mistakes – Coverage Advice from a Maine Insurance Agency

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When you buy Maine auto insurance, you choose liability coverage to insulate your assets from damages you might owe to others after a car accident. Your policy also includes uninsured motorist coverage, usually at the same limits.

Here are 4 auto liability insurance mistakes our Maine insurance agency works hard to save you from – and how to avoid them.

1) Meeting State Minimum Limits.

Buying Maine State Minimum liability insurance limits is like getting a “D” on your report card. You pass, but just barely. Maine’s minimum requirements ($50,000 per person / $100,000 per accident for Bodily Injury, $25,000 for Property Damage) are comparatively strict – higher than every state except Wisconsin. That’s good, right?

Think about what that might need to pay for.

Bodily Injury coverage pays people you might injure for their

  • Hospital & Doctor Bills
  • Lost Time from Work
  • Physical and Occupational Therapy
  • Pain & Suffering
  • Attorney’s Fees

Those expenses can easily top $50,000 for a moderately serious accident. What happens if you have a REALLY serious crash?

2010 Subaru Legacy: MSRP $25,000
Maine’s minimum property damage limit is $25,000. Still think that’s enough?

Property Damage Liability coverage pays for damage you cause to:

  • Other vehicles
  • Property in their cars (computers, golf clubs, etc.)
  • Buildings
  • Utility poles, guardrails, etc..


2) Forgetting that Insurance pays to defend you.

insurance does more than pay for damage and injuries you cause. It also pays for legal expenses – unless your liability coverage runs out. As long as you have insurance limits left, your insurer finds, hires and pays an attorney to defend you. The beauty of this is that your legal fees do not reduce the amount of coverage available to pay injured parties.

Plaintiff Attorney Ad
Still think $50,000/$100,000/$25,000 is enough?

If you watch TV in Maine, you’ve seen lots of ads urging injured Mainers to call a lawyer so they can “get what they deserve”. If you get in an accident without insurance – or, if you cause more damage than you bought insurance for – you’ll have to hire your own lawyer to defend yourself. With your own money. And, if you’re found liable, you’ll have to pay the damages on top of that. With your own money.

3) Keeping the Same Limits Year After Year

Insurance is the only thing between your assets and a liability judgement. The higher your net worth, the higher your liability limits should be. When you bought your first car, your net worth might have equaled the contents of your pocket. But gradually, you got ahead of the bills, made a little more money, maybe bought a house – and your net worth grew over time.

If you cause more damage than you have insurance, guess where the court will look for restitution? Your home equity, your savings, investments, and so on. So make sure your liability coverage at least matches your net worth. Think about buying an umbrella policy to supplement your auto & home liability coverage. They’re cheap, and can be the difference between an unfortunate accident and financial disaster.

4) Ignoring the Danger of the Uninsured – or Underinsured.

Your car insurance policy also protects you against uninsured or underinsured drivers. If someone hits you – their fault – and they have no insurance, your policy acts as if they had the same limits you do, and pays for your bodily injury. Same thing if they had low limits, and you bought higher ones.

See where this is going now?

But wait. Maine car insurance is mandatory. The State requires it to register your car. So everyone’s insured, right? Not really.

An estimated 4% of Maine drivers are uninsured – and that’s the 2nd best rate in the country. The Insurance Research Council estimated that nearly 14% of U.S. drivers had no car insurance at all. And that doesn’t count the people who buy minimal limits.

So Mainers are relatively honest folks. But what about everyone else? What’s that nickname on Maine’s license plates again? Oh yeah…

Maine license plate - "Vacationland"

Most of our out-of-state visitors are from the northeast, right? Click on the map below to enlarge it, and you’ll see that of the 10 states within an easy day’s drive of Maine, 2 do not require drivers to buy insurance AT ALL. Six more require per person Bodily Injury limits of $20,000 or less.

Map of uninsured motorist laws by state

Think you might want to increase your car insurance? Talk to a good Maine car insurance agent – like us for example.

4 Things Every Maine School Volunteer Should Know

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Most schools couldn’t run without parents and grandparents who act as classroom helpers, dance chaperones, PTO officers, fund-raisers and field trip drivers. Volunteering is a great way to be involved in your children’s education, and to meet their classmates and their families. It can also expose you to liability. Does your insurance cover these activities?

Classroom Activities

School Volunteer
flickr photo by cambodia4kidsorg

  • While you’re volunteering in the classroom, the school’s insurance policy protects them against liability if someone gets hurt, provided you’re engaged in a school activity.
  • If you are sued individually, your homeowners or renter’s policy should pay to defend you against claims for bodily injury or property damage. Not every homeowners policy covers “Personal Injury” – such accusations as slander, libel, defamation of character or invasion of privacy. Make sure your policy has this coverage!

Outside the Classroom

Things are a little trickier here. Let’s say you’re a chaperone on a field trip to the county fair, and one of your students wanders away from the group and is hurt.

Students on a Field Trip
Flickr photo gingerbydesign
  • The school’s insurance policy will protect them against liability on a school-sanctioned event. Most policies will also protect volunteers, but you never know how much coverage the school district bought, or even if the premium has been paid to keep the policy in place.
  • Your homeowners liability coverage should again protect you if you’re sued for bodily injury or property damage (or personal injury if you took our advice above and bought that coverage). How much coverage do you need? We generally recommend a $500,000  liability limit, the most you can buy on most homeowners policies. You should also consider an umbrella liability policy to provide even broader asset protection.

What if you’re an officer in the PTO, or a fund-raiser? Some school policies will protect the PTO. Others do not. Before you join any non-profit board, you should find out whether your activities are covered. If not, your homeowners policy should protect you in the same way described above.

Two Big Holes

Your homeowners policy does not provide “errors and omissions” coverage (incorrect administration of the board) or “fiduciary” coverage (theft of money or property). All the more reason to make sure that the organization offers protection to you as a volunteer before you agree to serve.

Transporting Children

Child looking out a car window
flickr photo by woodleywonderworks

Most schools require proof of insurance before they’ll allow you to drive children to a school-sanctioned event. Their requirements may not be sufficient to protect you, though. It’s important to check on 3 coverages in your auto policy:

  • Liability – Too many people have liability coverage with “split limits” instead of “combined single limits”. A common split limit is $100,000 per person/$300,000 per occurrence for Bodily Injury, and $100,000 for Property Damage. Most people think that means they have  $300,000 of liability coverage if they’re at fault in an accident. Not really – unless 3 people are hurt, each with up to $100,000 of injuries. What they really have is $100,000 per person. By comparison, a $500,000 “combined single limit” policy has up to $500,000 to pay for Bodily Injury or Property Damage, no matter how it’s needed.
  • Uninsured Motorist – Although Maine mandates that drivers have liability insurance, many still don’t. And, the State minimum limits are a scrawny $50,000 per person/$100,000 per accident. If someone who’s un- or under-insured hits you, your UM coverage protects you and people riding with you up to the limit you choose. Choose wisely!
  • Medical Payments – You don’t have to be in an accident for someone to be hurt in or around your car. It doesn’t even have to be your fault. A kid could slam someone’s finger in a door, or close a hatchback on someone’s head. Kids have even been known to engage in horseplay in the car – hard to imagine, isn’t it? Anyway, the kid’s family’s medical insurance should pay for those injuries, right? Yes – unless they’re one of the 45 million uninsured Americans. Then, they might sue you for their injuries. So, make sure you choose appropriate medical payments limits if you’re transporting other peoples’ kids – whether for school or not!

Should Maine Homeowners Escrow Their Home Insurance?

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As a Maine insurance agency, our clients often ask whether they should have their bank or mortgage company pay their homeowners insurance, or whether they should pay it themselves.

Often, lenders give you no choice; they insist on escrowing property taxes and insurance – especially if you’re a first-time homebuyer, or your credit rating is close to their eligibility threshold. The “golden rule” applies: the one with the gold makes the rules. If you want to borrow from them, you’ll escrow.

 But if you’re an established homeowner, have a very good credit score, or are an especially desirable credit risk, you can ask to pay your own insurance or taxes.

How Escrow Works
Lenders collect some money at closing to seed your escrow account – commonly, 3-4 months of taxes and insurance. That way, they always have YOUR money to pay the bills when they arrive, instead of theirs. Part of your monthly mortgage payment goes to your escrow account. You pay 1/12 of your property taxes and homeowners insurance premium each month.  By Maine Law, your lender must pay you interest on the balance in your escrow account.

Escrowing Your Insurance is a Good Idea if:

  • You’re not good at budgeting money for big payments.
  • You’re not good at paying bills on time.
  • You want to spread your payments over 12 months, without billing charges.
  • You don’t mind the bank holding onto hundreds to thousands of your dollars.
  • You don’t make lots of changes to your homeowners policy.

Problems with Escrow
Escrow works pretty well, as long as things don’t change. The most common problems occur when:

  • Your bank sells your mortgage, and no one tells your insurance company.
  • Your bank changes its address, and your policy is not updated.
  • Your bank loses/never gets/doesn’t pay your insurance premium, and your policy cancels.

To be fair, the first two would be problems even if you didn’t escrow. The bank wouldn’t get their copy of your policy, and soon you’d get a nasty note, saying that they need a copy of your insurance policy. But at least your policy would still be in force. That’s not the case if #3 happens.

The Bottom Line
If you’re financially disciplined and business-savvy – or just a control freak (you know who you are), you probably want to pay your own insurance premiums – unless your bank forces you to escrow. After all, once you pay off your mortgage – and you will someday – you’ll pay the premiums and taxes yourself anyway. Why not get used to it now?

If you have questions about escrowing or buying home insurance in southern Maine, call Noyes Hall & Allen Insurance at 207-799-5541.

Local Fan, Cape Elizabeth Boosters Win Jackpot from Local Insurance Agency

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Falmouth High basketball fan Adam and the Cape Elizabeth Boys’ Basketball Boosters split a $600.00 jackpot after Adam sank 3 consecutive shots in less than 30 seconds at halftime of Tuesday’s Falmouth / Cape contest Tuesday night. Noyes Hall & Allen Insurance has sponsored the contest for several seasons.

Adam collects his prize from Noyes Hall & Allen Insurance
Bob O’Brien and Dave McKenna of Noyes Hall & Allen present a check to Adam, who won the Cape Booster Shoot jackpot.

At halftime of every Cape Elizabeth Boys’ home game, the Boosters draw a 50-50 ticket. The winner gets 30 seconds to make a free throw, 3-point shot, and half-court shot. If they make all three shots, they split the jackpot with the Boosters. The jackpot starts at $200 and increases by $100 every game in which it is not won.

There have been a few winners over the years, but none has accomplished it in 3 shots before. Adam did it with “nothing but net”!

Noyes Hall & Allen is proud to sponsor the Cape Booster Shoot as a way to help local sports and extend its community involvement.

Congratulations to Adam – and to the Boosters!

First Winter as a Maine Homeowner? Avoid the “Big 3” Headaches

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This recent blast of cold weather reminds us that winter’s coming. Every year, some clients of our Maine insurance agency report water or ice damage to their property. Many of these come from people who are spending their first winter since buying or significantly renovating their homes.
Every house is different; depending upon the roof shape and slope, landscaping, location and elevation, some homes are more exposed to winter’s peril more than others.
Here are a few tips to help you and your home weather your first winter together.
cold weather thermometerSNOW
• Watch for snow accumulation on the roof. Heavy snow load can lead to roof collapse. A roofing contractor will often be a good source for a reputable snow removal service.
• Remove snow from basement stairwells, window wells and all walls.Melting snow can lead to water damage and moisture intrusion.
ICE DAMS
Ice Dams are an accumulation of ice at the lower edge of a sloped roof. A warm attic melts snow, causing water to run down and refreeze at the roof ’s edge, where it’s much cooler. If ice builds up and blocks water from draining off the roof, water is forced under the roof covering and into your attic or down the inside walls of your house.Anatomy of an Ice Dam

• Keep your attic well ventilated so it maintains a temperature close to that of the outdoors, which will minimize the risk of ice dams forming.
• Make sure your gutters are clear of leaves and debris.
FREEZING PIPES
Pipes in attics, crawl spaces and outside walls are particularly vulnerable to extreme cold. To keep water in your pipes from freezing:
• Fit exposed pipes with insulation sleeves or wrapping to slow heat transfer.
• Seal cracks and holes in outside walls and foundations near water pipes with caulking.
In bitterly cold weather:
• Keep cabinet doors open to allow warm air to circulate around pipes.
• Keep a slow trickle of water flowing through faucets connected to pipes that run through an unheated or unprotected space.

Maine Homeowners – Thinking About a Pellet Stove?

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Pellet stoves are hot. Over 50% of stoves bought in the U.S.  in 2008 were pellet-fueled, according to the Pellet Fuels Institute.

A Wood Pellet StoveAny kind of wood-burning appliance causes concern for fire insurance companies. Insurers are often slow to adapt to new technology, since they rely on experience statistics to help them set rates and underwriting guidelines. However, most insurers understand the popularity of these stoves, and are trying to accomodate home owners who use them.

Operated and maintained properly, well-built stoves can be a safe, economical way to heat your home. If you buy one, your insurance company will probably ask some questions about it. Here are some of the insurance company guidelines we’ve seen.

5 Keys to Making Your Pellet Stove Insurable

  1. Make sure your stove is UL listed. Many U.S. insurers will only insure American or Canadian built pellet stoves.
  2. Many companies will only insure top-fed stoves. Bottom and side-fed stoves are considered to be harder to consistently maintain. This may change with future designs and as more experience develops.
  3. Avoid an appliance that is capable of burning Standard PFI rated pellets. Some insurers will not accept them.
  4. Although manufacturers’ requirements may be more lenient, insurance companies tend to require the same heat shielding and fireproof hearth as they would for a standard wood stove.
  5. If your stove has a power exhaust vent, many companies require a 1 foot projection of the vent from any combustibles (e.g. siding) through an approved thimble. Because power exhaust vents require electricity, several insurers require a battery backup or generator to prevent a puff-back in a power outage.

It’s always smart to ask your agent or insurance company before installing a wood-burning appliance. If you have any questions, contact Noyes Hall & Allen Insurance .

7 Tips for a Safe Halloween from a Maine Insurance Agency

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Halloween is a lot of fun, especially for children. It is also one of the most dangerous nights of the year. Here are 7 tips to make sure the scares remain all in fun.

photo of a jack-o-lantern

For Trick or Treaters

  • Be Visible – Carry a flashlight; apply light-reflecting material to costumes.
  • Stay Together – Travel in groups, stay in well-lit areas and cross only at corners – never between parked cars.
  • Inspect Childrens’  Treats – Never eat unwrapped items. Throw away any suspicious candy.

At Home

  • Keep jack-o-lanterns away from areas where children may tip them over or get too close. Even better: use battery-operated lights.
  • Remove lawn furniture and other obstacles from your yard. Children don’t always use the sidewalk.
  • Keep pets inside and away from the door. Halloween night can be stressful, even on the friendliest pet.

On The Road

  • Drive more slowly and carefully than usual. Children may be running, wearing dark costumes, or darting into the street. And , of course, drive sober!

First Time Maine Homeowners Lead Real Estate Rebound

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The number of Maine homes sold increased by 22.74% in September compared to the same month last year, the Maine Association of Realtors reported last week. While the Median Sales Price declined 6%, prices seem to be rebounding a bit. The decline in Median Sales Price indicates that homes in lower price ranges were moving faster than larger, more expensive homes. This is likely due to the influx of first time homebuyers responding to the government stimulus rebate program.

Graph of Home Sales in Cumberland and York County Maine July to September 2009 vs. 2008
Cumberland County fared better than the state average.

September’s results were the best of the quarter. From July through September 2009, 14.7% more homes sold compared to 2008, with the Median Sales Price 9.6% lower than last year. Cumberland County performed slightly better; 23.55% more homes sold this year, with a 6.1% drop in Median Sales Price.

First Time Home Buyers Must Act Soon!
Realtors report that first time homebuyers are driving the market, aided by government stimulus tax credits. Unless extended, this program will expire soon. Home sales must close before November 30 to qualify for the plan.

In our South Portland insurance agency, we’ve seen a similar trend. Many of  the homeowners insurance quotes we’ve delivered this summer were for first time homebuyers. We take extra time to help the new home owner understand homeowners insurance, closing costs and escrow procedures. We also work with lenders to make sure that there are no surprises at closing. Contact Noyes Hall & Allen Insurance for a no-obligation consultation: 207-799-5541.

Download the Maine Association of Realtors’ press release.

Maine Coastal Home Owners Have Insurance Options

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Mainers who own homes near the coast – even as far as a mile from the shore – are having a harder time finding homeowners insurance.  Despite a quiet Atlantic hurricane season so far this year, Insurers are acting on more dire long-term hurricane predictions and historically poor loss history on the East Coast.

Most insurers are reducing their appetite for insuring coastal homes. Some are refusing to insure homes within a mile of the coast, even for customers they’ve insured for years with prior homes. Those companies that do insure coastal property may require higher deductibles or charge higher rates than in prior years.

At Noyes Hall & Allen Insurance, we’re fortunate to represent many insurers, and have access to many more. We still have preferred options available for coastal homes if it’s your primary home. If your homeowners insurance premium or deductible increase has gotten your attention, or if you’re buying a new home near the coast and finding insurance problems, call us at 207-799-5541 or find live support on our web site .

Secondary and seasonal homes on the coast are more difficult to insure. We recommend that you contact the insurer of your primary residence to see what options they might have available for your vacation home. Otherwise, your insurance options will likely be limited. The pricing and coverage terms will probably be less than desirable.