Individual Cyber Insurance – Protection Against Cybercrime

Individual Cyber Insurance protects against data breach, online fraud, cyber ransom and more. As our lives become more digital, we’re vulnerable. Identity theft, cyberbullying, phishing and ransom attacks are constant risks. Cyber insurance can help reduce your inconvenience and loss.

Individual cyber insurance protects against data breach, fraud, hacking, phishing, malware, ransomware and more.

What Does Individual Cyber Insurance Cover?

Cyber insurance for individuals is different than businesses cyber coverage. It pays to repair your online identity and reimburse for theft due to computer fraud. Coverage forms vary by insurance company. Some common examples of personal cyber liability coverage are:

Online Fraud and Identity Theft

Bad actors are everywhere on the internet. Spoofing. Phishing. Scamming. They’re looking for a quick buck or to capture your personal information or bank account info. A good cyber insurance policy reimburses you for fraudulent charges.

Ransomware or Cyber Extortion

Ransomware is malicious software that disables your computer or steals your data. The criminals then offer to fix the issue – for a price. Cyber insurance can pay for expert counsel to respond to the extortion.

Cyberbullying

Cyber crime isn’t always about money. Experts estimate that 1 in 6 teens have been bullied online or by text. Cyber Insurance can cover the cost of counseling, tutoring, and legal expenses.

Individual Cyber Insurance Against Data Breach

Every day, criminals hack companies and organizations and steal their clients’ personal information. Smart companies buy their own cyber insurance. That can help their customers. But personal cyber insurance can help, too. Cyber insurance can connect you with credit monitoring and identity restoration services. It can also pay for that professional help.

Identity Fraud Expense vs. Individual Cyber Insurance

Identity Fraud Expense coverage sounds good. But it’s much weaker than true Cyber Insurance for Individuals. Identity Fraud Expense reimburses you for costs to report and challenge identity theft. Examples include notarizing costs, loan re-application fees and some lost income for time spent meeting with credit agencies and lawyers. This is a fraction of the true damage of cyber crime.

Cyber Insurance also pays the costs of those extra services to help you fix things. But even more, it also repays money you lost to fraud or illegal activity. That’s much more valuable and meaningful insurance coverage.

Cyber Security Vendors (e.g. Lifelock) vs. Individual Cyber Insurance

Cyber security vendors provide a valuable service. They can help monitor your data and credit. They can also help with password protection and other loss prevention activities. In fact, insurance companies often partner with vendors to offer these services when you buy individual cyber insurance. But in addition, cyber insurance reimburses you after a covered cyber event. Some third party vendors don’t do that.

Where to Get Individual Cyber Insurance

Personal cyber insurance is usually bundled with homeowners or condo insurance instead of on its own. Few companies offer it in Maine as of Spring 2022. High-value home insurers like AIG and Chubb do.

Hanover Insurance offers cyber insurance to middle-to-upper income households as part of their bundle. Andover Companies do, too. We expect other Maine insurers will follow suit.

Get a Quote for Personal Cyber Insurance

Do you live in Maine? Interested in a quote for individual cyber insurance? Although options are limited now, the market is changing quickly.

Contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. As an independent agency, we’re not limited to one insurance company. That means we can compare and offer options that are available. We’re independent and committed to you.

Liquor Liability Insurance in Maine

Liquor liability is a risk for Maine businesses and not-for-profits that provide alcohol. Whether your sell or serve, you can be liable under the Maine Liquor Liability Act. You can be responsible for property damage, injury or death caused by the alcohol you provide. Liquor liability insurance can help.

Liquor liability is a risk for those who sell and serve alcohol in Maine. Liquor liability insurance can help.

Do I Need Liquor Liability Insurance?

If you don’t SELL alcohol…

Regular business liability coverage may be all you need. Most business general liability policies include “host liquor liability” coverage. That covers you for providing alcohol at a social event where guests aren’t paying for it. For example an open house or special event where drinks are available. Granted, you can still be liable for the effects of alcohol you provide. But you may not need special insurance.

If your business or organization sells or serves alcohol…

You DO need separate liquor liability insurance. Typical examples include

  • Bars, pubs and taverns
  • Breweries and distilleries with tasting rooms
  • Restaurants and cafes
  • Retail stores
  • Performance venues
  • Private clubs
  • Dance clubs

For instance, someone could claim the alcohol you sold caused injury or damage. While your general liability insurance will not respond, but liquor liability insurance would.

Possible Liquor Claim Examples

  • Auto accidents – a patron you serve gets behind the wheel and crashes, injuring someone. Or worse. The police test their BAC and find them over the legal limit.
  • Serving underage patrons, even by mistake.
  • Altercations or violence – an intoxicated patron (or two) gets into a fight. They injure others as a result. (Note, some liquor liability policies exclude assault and battery).
  • Serving someone excessively – you can be responsible for their injuries or death.
  • Serving an obviously intoxicated person – you can be responsible for resulting harm.

Are Damages for Maine Liquor Liability Capped?

The Maine Liquor Liability Act limits damages to $350,000 per incident. But that doesn’t include medical care or wrongful death. Medical care liability is unlimited. Even more, Maine’s Wrongful Death Statute allows up to an additional $750,000. In other words, serving liquor can get you in plenty of trouble. Protect your assets with Liquor Liability Insurance.

How Much Does Maine Liquor Liability Insurance Cost?

Costs vary greatly according to exposure. For example, the smallest liquor liability exposures can cost as little as $250 a year. On the other hand, businesses selling a lot of alcohol can spend several thousand dollars a year.

Cost factors include:

  • Alcohol sales revenue
  • Ratio of alcohol sales to other retail sales (stores)
  • On-premises consumption vs. take-away
  • Ratio of alcohol receipts to food (restaurants).

How to Reduce Insurance Costs

Meanwhile, controlling those factors are a good way to reduce insurance costs.
For example:

  • Server education training for employees (TIPS, etc.)
  • Written policies and procedures for servers, with compliance monitored by management.
  • Strong ID checking procedures
  • Providing non-alcoholic beverages
  • “Ride home” alternatives for patrons who appear intoxicated
  • Keeping a log book of any incidents – or potential incidents

Part of Your Total Insurance Plan

Does your Maine business or organization sell or serve liquor? Talk to a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We can advise whether you need liquor liability insurance. If you do, we can help you incorporate it into your overall insurance program.

Because we’re locally owned and independent, we offer a choice of insurance companies. In other words, we can help you find the best value for your insurance protection. We’re independent and committed to you.

Maine Business Vehicle Insurance: Can GPS Reduce Costs?

If you operate a Maine business, vehicle insurance can be major expense. Business fleets are necessary tools for many businesses. They also create costs, liability and control issues. GPS fleet monitoring solutions are more widespread and less expensive than ever. Some Maine businesses are using them to track their fleet and reduce Maine business vehicle insurance costs at the same time. 

GPS fleet monitoring technology can help reduce Maine business vehicle insurance costs.

Control Personal Use to Reduce Maine Business Vehicle Insurance Costs

Many Maine businesses prohibit personal use of company cars and trucks. This reduces fuel and maintenance expense, and reduces the company’s liability exposure. GPS reporting and tracking discourages employees from using company vehicles for personal purposes.

Reducing Business Vehicle Theft with GPS

GPS Tracking systems can deter theft. They also increase the odds of recovering a stolen vehicle. It can take police a long time to recover a vehicle if it has no anti-theft system. Meanwhile, your business has to rent or buy a replacement.

Some stolen vehicles are never recovered. However, with GPS tracking, you can lead police to the exact location. This reduces recovery times and minimizes cost for everyone.

Promoting Safe Driving Reduces Maine Business Vehicle Insurance

Safe driving saves fuel and reduces insurance costs. Employees who know that their driving is being monitored operate with extra caution.

Nowadays, GPS devices can record incidents like heavy braking, rapid acceleration and speeding. Management can run reports to check driving. The business can use this data for training, driver screening or accident reconstruction.

Improving Job Accounting and Customer Service

GPS technology can even help Maine service businesses simplify accounting and improve customer service. For instance, GPS reports can track how long a service vehicle is parked at a job. Likewise, real-time reporting can verify that your technician arrived at the promised time and remained at the job.

In addition, GPS can improve customer service. For instance, GPS directions can help drivers find the fastest route to the job. Also, real-time traffic monitoring can suggest time-saving alternate routes. Moreover, with GPS monitoring, your business can text a customer about a delayed driver and provide a new ETA. 

Maine Business Vehicle Insurance Discounts for GPS Users

Insurance companies give preferred pricing to businesses that control their exposures well. At the same time, fleet GPS implementation helps insurance companies, too. Safer driving means fewer accidents. Fewer non-business miles reduces road exposure. GPS tracking can help recover a stolen business vehicle. 

In the future, insurance companies may use GPS data to customize rates for each business customer. Meanwhile, they’re happy to encourage their customers to use GPS to avoid or reduce losses. For instance, they may provide business vehicle insurance discounts.

Has Your Business Invested in Fleet GPS Monitoring? 

Your Maine business has invested in GPS vehicle fleet monitoring. Are you maximize your return on investment? Call Noyes Hall & Allen Insurance in South Portland.

We are a locally owned independent agency. That means we represent many of Maine’s preferred business auto insurance companies. Our agents can help you check the insurance market. In other words, they can help make sure you get the best value for your business insurance. At Noyes Hall & Allen, we’re independent and committed to you.  

Comprehensive and Collision Insurance – What’s the Difference?

Comprehensive and collision insurance is how most Maine people and businesses insure their vehicles. Though often lumped together, they’re really separate coverages. What’s the difference between them? Do you need both?

comprehensive and collision insurance cover damage to your vehicle

Comprehensive and Collision Insurance Cover Your Vehicle

Both comprehensive and collision insure damage to your vehicle. The insurance company pays up to the “actual cash value (ACV)” of the vehicle, less your deductible. ACV is usually close to market value. The insurance company may declare a vehicle a total loss if the damage exceeds 75% of its value.


Related Post: What Happens When a Vehicle is Totaled in Maine?


Collision Coverage is Mostly What it Sounds Like

Collision coverage applies when you strike a fixed object or another vehicle. For example,

  • You crash into another vehicle
  • Another vehicle crashes into you (even if you don’t know who did it)
  • You back into a post or building
  • You strike an object in the road
  • A runaway shopping cart scrapes your vehicle at the grocery store.
  • You damage your wheel in a pothole

Collision pays the cost to repair your vehicle, up to the Actual Cash Value (ACV).

Comprehensive Insurance Really Isn’t

Although commonly called “comprehensive” coverage, you won’t find that word in your insurance policy. Its official insurance name is “Other Than Collision”. Insurance nerds will correct you, lest you think that it really does cover everything.

But Other Than Collision coverage is pretty broad. It covers most other things that can damage your vehicle. For instance:

  • Fire
  • Theft
  • Vandalism
  • Glass breakage or cracking
  • Hitting an animal (that isn’t collision, believe it or not).
  • Flood
  • Tree branches, flying road debris and other falling objects
  • Hail

Should You Have a Special Glass Damage Deductible?

Glass damage is part of “other than collision” coverage. In fact, it’s the most common kind of comprehensive claim. Replacing a windshield may cost more than you think. That’s why many people choose a lower glass deductible. This allows them to save money with a higher deductible for other comprehensive claims, but not pay $1000 for a windshield.

Keep in mind that most insurance companies waive the deductible for glass repairs vs. replacement. Many cracks and chips can be repaired so well that it’s hard to detect afterwards.


Related post: When Should I Drop Collision Coverage?


Maine Auto Insurance Questions?

If you live or own a business in Maine, contact a Noyes Hall & Allen agent for prompt, professional insurance answers. We offer a choice of many of Maine’s top business insurers. In other words, we can help you find the best fit and value for your insurance. Because we’re independent and committed to you.

Insurance Broker or Agent – Which is Better?

Insurance broker or agent. Which is better? Is there even a difference between a commercial insurance broker and an independent business insurance agent?

Insurance broker or agent can help you get the best value for your insurance

Insurance Broker or Agent – the Legal Difference

Agent and broker are legal terms. They mean something different.

Independent insurance agents contract with insurance companies represent them to the public. Those contracts grant agents the authority to “bind” the insurance company to certain commitments. Agents offer efficiency, flexibility and local knowledge that big insurance companies don’t have. That benefits both the companies and the clients.

Insurance Brokers have no authority to bind insurance companies. The insurance company or its agent must approve a broker’s request to bind insurance coverage.

Duties Owed by Insurance Broker or Agent

A broker’s duty is to their client. They have to be honest with insurance companies, of course. But they have no contractual obligation to any insurance company. In theory, a broker could place their clients’ insurance with any insurer licensed to do business in their state.

An agent owes a duty both to the insurance companies and their client. Because they’re contracted directly with insurance companies, therefore they owe an extra duty to those companies in return for the authority that the companies give them.

An agent also owes duties to their client. In Maine, those duties include:

  • firstly, to act in good faith
  • secondly, to use reasonable care and diligence in serving best interest of the client
  • and finally, to carry out the client’s instructions

Sometimes an Agent is a Broker

Sometimes insurance agents use non-contracted insurance companies to get the best deal for their clients. They may even work with another agent who has a contract to represent a company that they themselves don’t. In those cases, they’re essentially acting as brokers. They have no authority to bind or commit the insurance company. And they owe no contractual duty to the insurer.

How An Insurance Broker or Agent is Paid

Both agents and brokers work on commission. Insurance companies pay a percent of the premium to the producing agent or broker. That commission may also be shared between an agent and a broker.

Some brokers also charge fees to their clients for certain services. For example, clients could hire a broker to help them improve their claim history. Some brokers also charge for transactions, for example issuing proof of insurance.

Advantages of Insurance Brokers vs. Agents

  • First, brokers represent their clients, not insurance companies. They have no contractual obligation to the insurance company.
  • Second, brokers may have access to more insurance companies than an agent. Agents often have contracts with 8-10 insurance companies. In theory, brokers can access any licensed insurer.
  • Third, brokers may provide additional services that agents cannot. For example, claims management, self-insurance or safety consulting.

Advantages of Independent Agents vs. Brokers

  • Speed and efficiency. Agents can bind coverage on behalf of insurers. That reduces the time to put coverage in force. They also know their insurance companies well. They know how to quickly get things done.
  • Insurance company influence. Insurers work closely with their agents. They trust them. They also rely on agents to bring good customers to them. Therefore, agents often have influence with insurers to advocate for their clients.
  • Local knowledge. Many agents are embedded in their communities. They know the geography, culture and customs of their area. They work with families and businesses of all sizes. Brokers tend to be larger and operate in a wider area.

A Maine Independent Agency

Do you live in Maine? Looking for a Portland area independent insurance agent? Contact a Noyes Hall & Allen agent in South Portland at 207-799-5541. We offer a choice of many of Maine’s top insurance companies. In other words, we can help you find the best fit and value for your insurance. Because we’re independent and committed to you.

Professional Liability Insurance vs. General Liability in Maine – What’s the Difference?

Professional liability insurance and general liability insurance are different. Maine businesses and non-profits may need both. What’s the difference between professional liability insurance and general liability insurance?

Professional liability insurance protects consultants, creatives and more.

What is General Liability Insurance?

GL insurance protects your business’ assets against four types of lawsuits:

  • firstly, Bodily Injury caused by your actions, or that happen on your premises. For example, slips and falls in a parking lot, or a contractor dropping a hammer from a scaffolding, injuring someone.
  • secondly, Property Damage  that you cause to the property of others. For example, your crew knocks over a valuable vase while cleaning someone’s home.
  • thirdly, Personal Injury, such as slander, libel or invasion of privacy. For instance, a realtor walks into an occupied apartment without warning.
  • and finally, Products and Completed Operations Liability – in case your product or work harms someone or their property. An example: a diner gets food poisoning after eating in your restaurant, or your roofing job fails, causing water damage at someone’s house.

Moreover, general liability insurance pays your legal defense costs against these types of suits – even if you did nothing wrong!

What is Professional Liability Insurance?

Professional liability insurance, sometimes called E&O insurance, protects against claims of:

  • Negligence – for example, a real estate agent fails to disclose a defect in a property, or a planning consultant who misses an important regulation, causing their client to incur large penalties.
  • Improper or Inadequate work – for instance, copyright infringement, improper design, or a clerical error that costs your client money.

Like general liability, professional liability insurance also pays legal defense costs.

Do I Need E&O Insurance?

Professional liability is a hazard in almost any profession. Some of the most common ones include:

  • Architects and engineers
  • Accountants, attorneys and bookkeepers
  • Beauticians, tattoo parlors and other personal service providers
  • Condominium and non-profit boards
  • Consultants and coaches
  • IT professionals
  • Marketers, creatives, drafters and designers
  • Medical and health care professionals
  • Real estate and property managers

Professional Liability Insurance Questions?

If you have Maine professional liability insurance questions, contact a Noyes Hall & Allen agent for prompt, professional answers. We offer a choice of many of Maines top business insurers. We also have access to dozens of specialty insurers. In other words, we can help you find the best fit and value for your insurance. Because we’re independent and committed to you.

Water and Sewer Backup Insurance – What is It, and Do I Need It?

Water and sewer backup insurance coverage isn’t included in off-the-shelf homeowners or business policies. But backup of water is a very common cause of property damage in Maine. Therefore, we’re lucky that optional coverage is available and easy to buy.

water and sewer backup insurance can help with cleanup and repair

What is Water and Sewer Backup?

Water and sewer backup insurance covers backup from a sewer, drain or sump. Remember, it’s not covered by standard home or business insurance. In Maine, water backup is commonly caused by high groundwater level or a plumbing blockage or malfunction. For instance:

  • A sump pump fails, causing water to flood a basement
  • A check valve malfunctions, causing a backup of sewer or water
  • A sewer drain clogs, backing up wastewater

What Does Water and Sewer Backup Insurance Cover?

Coverage can be thought of in steps:

  • firstly, removal of water or sewage
  • secondly, drying and disinfecting
  • then, cleanup of waste or debris
  • finally, repair or replacement of damaged property

What’s Excluded?

Leakage or seepage through a foundation or slab isn’t considered water backup. Moreover, it’s not covered by any insurance form.

Leaking from plumbing or heating systems is often covered by homeowners or business policies. So it’s not included in water backup coverage.

How Much Does Water and Sewer Backup Insurance Cost?

Water backup insurance usually has a separate coverage limit. The minimum amount is often $5,000. Most companies’ offerings max out at $25,000. Cost varies by insurer and coverage limit. Prices start around $50 per year, and can be as high as $250. Business insurance policies are different. So check with your agent about coverage for your business.

How do I Choose a Water and Sewer Backup Coverage Limit?

First evaluate your exposure. How much damage would inches of water cause? For instance, do you have finished space in the lower level of your home? Do you store anything damageable there? Moreover, cleaning, drying and disinfecting often costs $5,000 or more. And that’s before repairing or replacing any damage. The average water damage claim is more than $11,000.

I Don’t Have a Sump Pump. Do I Need Water and Sewer Backup Insurance?

You can still suffer water backup without a sump, because water can back up from any drain or sewer in the lowest level of your home. However, if you have none of these, you probably don’t need water backup coverage.

I Have City Sewer and Water. Do I need Water and Sewer Backup Coverage?

Backup can occur from public utilities, private wells or septic systems. Above all, it matters whether you have a sewer, drain or sump, not what kind of services you have.

Need Help? Ask an Agent

In conclusion, water and sewer backup coverage can be an important addition to your insurance.

Do you live in Maine? Have questions about water and sewer backup insurance? Contact a Noyes Hall & Allen agent in South Portland at 207-799-5541. We offer a choice of many of Maine’s top insurance companies. In other words, we can help you find the best fit and value for your insurance. Because we’re independent and committed to you.

What is General Liability Insurance?

General liability insurance is important for Maine businesses. If you operate a business in Maine, customers or the town may demand a certificate of insurance. This proves that you have general liability coverage. Some people think about liability insurance when they first start their business. However, others don’t think of it until someone asks for proof.

General liability insurance protects you from a lawsuit that can destroy your assets

What Does General Liability Insurance Do?

GL insurance protects your business’ assets against lawsuits in four ways:

  • Firstly, Bodily Injury caused by your actions, or that happen on your premises.
  • Secondly, Property Damage  that you cause to the property of others.
  • Thirdly, Personal Injury, such as slander, libel or invasion of privacy.
  • and finally, Products and Completed Operations Liability – in case your product or work harms someone or their property.

 How Much Business Liability Insurance Do I Need?

Liability insurance protects your assets. Therefore, you should at least carry enough to protect the net worth of your business. Moreover, you may also need a certain limit of liability coverage to work for a certain client. For example, a $1 million per-occurrence limit is common. Higher limits are available, as are commercial umbrella policies, which provide even higher limits.

What General Liability Insurance Does NOT Protect Against

  • Professional Liability, such as improper design, malpractice, errors or omissions. You need separate Maine professional liability insurance to get this coverage.
  • Employment Practices Liability. This covers several HR-related perils. For example, wrongful termination, sexual harassment or employee benefits liability. You should purchase Maine Workers’ Compensation Insurance if you have these exposures.
  • Auto Liability. You should purchase  Maine commercial vehicle insurance if your company owns vehicles. Even if your company owns no vehicles, you should add Hired and Non-Owned Auto Liability coverage to your GL policy.
  • Pollution Liability. If your business uses pollutants, you should purchase separate insurance for this.

How Much does General Liability Insurance Cost?

Rates vary, starting at a few hundred dollars a year. Yours will depend on many factors, including:

  • Type of business or operation;
  • Your revenues or payroll;
  • How long you have been in operation;
  • Personal qualifications and licenses;
  • Prior claims;
  • Whether you combine your business property insurance with your GL coverage.

Business Liability Insurance Questions?

Do you have Maine business liability insurance questions? Contact a Noyes Hall & Allen agent in South Portland at 207-799-5541 for prompt, professional answers. We offer a choice of many of Maines top business insurers. We also have access to dozens of specialty insurers. In other words, we can help you find the right fit for your organization and budget. Because we’re independent and committed to you.

Business Insurance Inspection in Maine: What to Expect

Business insurance inspection is common in Maine. Commercial insurance companies routinely inspect businesses that they protect. Inspections allow them to make sure that they insure businesses that fit their guidelines and that their policyholders are adequately protected.

Is a Business Insurance Inspection Mandatory?

Inspections are expensive for insurance companies. They only perform them when they feel it’s necessary. Often, one of three conditions can cause an underwriter to order an inspection on your business:

  • You recently switched insurance to a new company. The new company wants to make sure that your business meets their underwriting requirements.
  • You recently had a claim. The insurance company may want to make sure that you have repaired any property damage or addressed the cause of a liability or workers comp claim.
  • Your business has expanded or moved. Businesses change, and so do their exposures to loss. Insurance companies inspect periodically to keep up.
  • The insurance company hasn’t inspected in several years. Things can change, even if your business stays about the same size and in the same place. The insurance company wants to make sure that your policy stays up to date in case they have to pay a claim.

inspectorCan I Opt Out of a Business Insurance Inspection?

Every insurance policy is a contract. Each policy has an “inspection clause”, which gives the insurance company the right to inspect your business with reasonable advance notice. If you refuse, it’s a violation of the contract. The insurance company can cancel your business insurance as a result.

Does the Insurance Inspector Need to Get Inside my Business?

Almost always. There are two types of insurance inspections: exterior only; and interior/exterior. The company underwriter decides which report to order based upon what they insure, your claim history, and other factors. Unless your property is a rented apartment building, the inspector will probably want to see all the areas.

What Does an Inspector Look For?

Insurance Inspector Should

Some inspectors are employees of the insurance company, but many are independent contractors. During a routine inspection, the inspector looks for features of your property or operation that can affect insurance claims. Items they typically inspect include:

  • Condition of roof, plumbing, electrical, HVAC and similar systems.
  • General property condition, paying particular notice to maintenance and general housekeeping.
  • Special hazards such as commercial cooking, chemicals, pollutants and machinery.
  • Controls and PPE to protect workers.
  • Dimensions of structures, so they can estimate the cost to rebuild them.

What Happens During a Business Insurance Inspection?

The inspector sends their report to the insurance company underwriter. If no deficiencies are noted, you will probably not hear from anyone. If the underwriter has concerns, they will ask you to address them. It’s important to pay attention and respond to these. Failing to do so can cause insurance price increases, or even policy cancellation.

If you have a question about Greater Portland Maine business insurance,  contact a Noyes Hall & Allen agent in South Portland at 207-799-5541. We offer you a choice of Maine’s preferred property insurance companies. We’re independent and committed to you.

Non-Admitted Insurance in Maine

“Non-admitted” insurance companies are not approved by the Maine Bureau of Insurance. But they play an important role in Maine’s insurance market. Non-admitted carriers are often called “surplus lines” or “excess lines” insurers. They take higher risks than admitted insurers. That comes at a cost. Here are the pros and cons of the non-admitted insurance market.

non-admitted insurance companies provide a valuable service, with some risk.

The Risk of Non-Admitted Insurance

  • Non-admitted insurance companies’ coverage forms are not approved by Maine regulators. Their customers don’t enjoy many of the Maine Insurance Code’s protections. But they are subject to federal regulation through the Dodd-Frank Act (.pdf, 800+ pages).
  • In case of insurer insolvency, the Maine Guarantee Fund does not apply. Even if a policy is active, claims might not be paid if the company goes bankrupt.
  • The Maine Bureau of Insurance doesn’t review or approve non-admitted insurance rates. They do with admitted insurers. Non-admitted insurers may charge what the market will bear.
  • Many non-admitted insurance policies have a “minimum earned premium” of 25% of the annual premium. Even if you cancel your policy right away, the insurer will keep 3 months’ premium.
  • Non-admitted insurers may add separate policy fees to premium. Those are usually non-refundable. They must add Maine surplus lines tax to the premium, too.

Non-admitted insurance is often more expensive and provides less coverage. That’s why Maine only allows non-admitted carriers to insure risks that admitted carriers refuse.

Non-Admitted Insurance Can be Valuable

Purchasing insurance from a non-admitted carrier isn’t ideal. But it is a valuable service.

  • Some protection is better than none. While non-admitted insurance coverage is restrictive, it can protect customers against catastrophe.
  • Non-admitted coverage can be a temporary solution. It can give you time to make improvements and qualify for insurance from an admitted insurer.
  • Most lenders will accept non-admitted policies as proof of insurance. Lenders require insurance from their borrowers in order to make a loan.

Be a Smart Insurance Consumer

Purchasing insurance from a non-admitted carrier can be risky. Since non-admitted insurers are not covered by the Maine Guaranty Fund, it’s important to research your insurer’s financial strength. But many non-admitted insurers have excellent A.M. Best financial ratings (.pdf). Ask your agent about yours.

Non-admitted insurance proposals list all applicable exclusions, warrantees and coverage forms. You should at least understand them, even if you can’t change them. Your agent should be able to explain them to you. If you’re a client, your Noyes Hall & Allen Insurance agent can answer questions about your insurance. We’re independent and committed to you.