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This accident happened right around the corner from our office. At noontime today, the damage was impressive: two large (and no doubt, expensive) glass walls were completely destroyed. Equally impressive was the speed of the repairs, which were in full swing. Fortunately, the bank was able to open today, so there was no “loss of income” suffered.

Hopefully, the driver of this vehicle had insurance. And hopefully, he paid attention to “the third number”.

The Third Number
Maine auto insurance policies provide liability coverage. Maine’s minimum liability limits are $50,000 per person and $100,000 per accident for Bodily Injury, and $25,000 for Property Damage. When you get a car insurance quote, the insurance company might quote those figures as “50/100/25″.

In the accident that happened last night, there was no Bodily Injury (thank goodness), only Property Damage. That means that the Third Number is what will pay for the damages.

I have no idea whether $25,000 would be enough to repair this building, but I wouldn’t want to find out the hard way. If a Maine driver doesn’t have enough insurance for the damage or injuries they cause, their assets are wide open to help pay for the other party’s loss. That’s why we never recommend buying State Minimum limits.

What’s Your Third Number?
When you get a car insurance quote, pay attention to ALL the numbers, including the “Third Number” – your Property Damage limit.

For professional, personal insurance advice, call Noyes Hall & Allen at 799-5541. We’ll help you understand what you’re buying, and help you make informed choices to find insurance you can afford.

The answer is a bit complicated.  It may help to look at the types of coverage that the car rental companies offer.  Of course, car rental contracts differ. It’s smart to request a copy of the rental agreement to review ahead of time with your Maine auto insurance agent.

Liability Damage Waiver

Maine auto insurance policies provide protection for liability you incur for injuries or property damage you cause to others within the U.S. Therefore, it’s not usually necessary to purchase a Liability Damage Waiver from the rental car agency since you usually already have coverage under your own insurance. An exception might be if you have purchased very low liability limits.

Collision Damage Waiver

Rental car agencies typically try to sell “Collision Damage Waivers” (CDW) for about $8 to $15 per day (an annual rate of $3,000+ a year) – pretty expensive for car insurance! These waivers are not insurance. In effect, a CDW simply buys a promise from the rental car agency that they won’t make you repair or replace a damaged or stolen vehicle.

If you already carry collision and comprehensive coverage under your own personal auto policy, your insurance will extend to the rental car. You should carefully evaluate your existing coverage and discuss with your Maine insurance agent whether or not purchasing a CDW is appropriate for you.

BUT…

There may be gaps between the coverage your insurance policy provides and your contractual obligation to the rental company.  For example, many car rental companies may hold you responsible for the loss of use of a damaged rental car. Many charge you the daily rental rate for every day the car is undergoing repairs (whether they were “sold out” or not). While many auto insurance policies will pay “loss of use” charges, those that do set dollar or time limits that may or may not match the rental company’s claim.

There are other expenses that most auto policies do not cover. One example is diminished value which can amount to several thousand dollars. Consult your independent insurance agent to find out what’s best for your travel needs.

Foreign Travel – You’ll probably have to purchase separate insurance when traveling outside the U.S. and Canada. Some personal umbrella policies may provide liability coverage for rental cars abroad; few will cover damage to the rental car itself.  Again, seek professional expert advice from an independent agent before you leave home.

Check the Vehicle

Protect yourself by checking the car carefully for damage – with a rental company employee present – before you leave the lot and when you return it. Request that all prior damages be noted in writing. We’ve heard about car renters being charged for damage weeks after turning in vehicles. If you didn’t have them check the vehicle when you returned it, there’s no way to prove your innocence.

The Bottom Line

Buying the waivers from the car rental company is the safest way to make sure you have no coverage gap. But, you’ll probably want to weigh the cost of those waivers against the additional risk you assume by not buying them.

What are your insurance questions? Our experienced, professional insurance agents are happy to provide answers or an insurance quote. Contact Noyes Hall & Allen Insurance at 207-799-5541.

Bon voyage!

Barbara, who’s worked for Noyes Hall & Allen for the past 13 1/2 years, is retiring. For such a small woman, she made a huge impact in her long insurance career.

Over the years,  she issued 3,000 new policies, reported 5,000 insurance claims, and made  15,000 policy changes for her clients. But  Barbara’s impressive work ethic is not the reason why she was so popular among her clients. Clients don’t care what you know unless they know that you care – and Barbara cared.

Clients paid many unsolicited compliments to Barbara’s service, year after year. This one from a new client sums them up best:

“While on a business trip, I realized I needed to review my policy. I was met by Barbara with courtesy, good cheer, excellent listening skills and efficiency. I care in that order and am really surprised by the excellent customer service from your company. With employees like Barbara, I’ll be with your firm for a long time.”

Noyes Hall & Allen has so many long-term clients because we are fortunate to have experienced professionals who provide great service. Barbara was one of the best.

We wish Barbara a happy, healthy and long retirement. She deserves it!

The contest isn’t even close. Residents of the next lowest state, Vermont, pay about 7% more than Mainers. The nationwide average: about $1,450 – a whopping 38% higher.

With our snowy, icy winters, why would our car insurance be so cheap? It’s not all about weather.  In fact, 7 of the lowest 10 states are in the snow belt.

Behind the Numbers
Car insurance rates essentially pay for 3 things:

• Repair Costs
• Medical Bills
• Legal Bills and Damages from Lawsuits

Maine’s costs for the first two are roughly in line with the rest of the country, but Mainers tend to be a bit less litigious than some other areas. That helps keep costs down.

Are Uncrowded Roads The Answer?
Maine is less congested than much of the country, but that’s not the whole reason behind our lower car insurance costs. Otherwise, Ohio, North Carolina, Arizona, Tennnessee and Massachusetts (yes, Massachusetts) wouldn’t also be in the bottom 10.

Our Theory
We think there’s something else behind the numbers: The rest of the country’s high percentage of uninsured drivers, and pitifully low minimum liability limits, and the number of people without health insurance.

You see, when someone has no insurance to pay their medical bills or repair their car, they’re more likely to try to “go against the other guy” after an accident, in an effort to avoid big bills. Even if you’re not at fault, if you’re “the other guy”, you can be sued, or the other party can try to make a claim against your insurance.

Even if a claim or suit is groundless, it costs your insurance company money to hire an attorney on your behalf or investigate the claim. That drives up insurance costs - for everybody.

So, maybe Maine really is…

Are you paying too much for Maine auto insurance? Get 4 competitive quotes in 10 minutes from Noyes Hall & Allen’s web site, or contact us at 207-799-5541. We represent 10 of the state’s top auto insurers. One call gives you access to all of them!

If You’re Buying a Home and Need Flood Insurance
Flood insurance servicing companies are collecting applications, but cannot accept them or bind coverage until the NFIP is re-authorized by the Senate. If your lender requires proof of flood insurance, this may delay your closing. Talk to your lender for more information. You literally can not buy flood coverage without an act of Congress.

If You Already Have Flood Insurance, and Need to Make a Claim
Claim payments  will be continued as usual for all policies currently in effect.

If You Have Flood Insurance and Need to Increase Your Coverage
Coverage cannot be increased on existing policies until the NFIP is reauthorized. This may delay a loan closing if you are refinancing or taking out a home equity loan.

If Your Flood Policy is About to Renew
Renewal policies can not be issued during the lapse. Many companies sent renewal bills prior to March 28. If you received a bill and paid it, your coverage should be in force. If your premium was not paid before March 28, coverage cannot be bound until after the NFIP is reauthorized by Congress.

What You Can Do
The NFIP is the only primary flood insurance available for residential properties. Many insurers have a servicing contract to issue business on behalf of the NFIP, but it is a government program. Without reauthorization, the program is essentially shut down. Call or email your senator to let them know what this lack of funding means to you. While there’s no guarantee, the NFIP reauthorization will likely be retroactive to March 28 – once it’s finally passed. That’s usually what happens in these cases.

Even during normal operation, the National Flood Insurance Program operates differently than most insurance programs. There are waiting periods and underwriting rules and requirements that are unique to this program. It’s impossible to advise you about your individual situation with a blog post like this. Call a Maine homeowners insurance agent for advice about your own insurance.

UPDATE:
As of April 15, 2009, Congress passed, and the President signed into law, a bill reauthorizing the National Flood Insurance Program (NFIP) until May 31, 2010.  The extension included retroactive funding to cover two gaps in the program (March 1 – 2 and March 29 – April 15, 2010). The program will expire again on May 31 unless it is further extended. Stand by!

The Root of the Problem
Who’s responsible if a worker is hurt on the job? Contractors’ Maine workers comp policies pay the costs of medical and lost time damages for their employees. Contractors are not responsible for injury costs for independent contractors; the independent should buy their own workers comp insurance to protect themselves and their own employees.

Up to Now
Until recently, Maine workers comp insurance agents instructed their contractor clients to obtain certificates of workers comp insurance from subcontractors. Then, when the insurance company conducted the Maine workers comp audit, the premium auditor would exclude the subcontracted cost when calculating workers compensation premium. This was an effective cost and risk control technique.

A New Maine Independent Contractor Definition
A new Maine law, effective January 1, 2010, (P.L. 2009, Ch. 452) sets a new standard for defining an independent contractor in the construction industry. It says that a person is presumed to be an employee unless that person meets all 12 parts of a new definition of independent contractor.

Contractors must pay Maine workers compensation insurance (by reporting the payroll to their workers comp insurer) for anyone who does not meet that new definition. Moreover, the employer must get pre-determination before each job starts, or all workers are considered employees.

What’s a Contractor to Do?
Under  PL 2009, a contractor must obtain either:

1. A Maine workers compensation certificate of insurance for the independent showing that coverage was in force for the duration of the job; or
2. “Predetermination of Independent Contractor Status” from the Maine Workers Compensation Board. This predetermination is not binding – an injured worker might still be shown to be an employee after the fact – but it allows the contractor to presume that the worker is an independent contractor, and thereby not purchase Maine workers compensation insurance on their behalf.

The Maine Workers Comp Board does not approve predetermination requests retroactively; the contractor must have the determination letter as of the date the work begins. Moreover, the Maine Workers Compensation Board took the position that a predetermination is required for each and every job that the independent does, regardless of the scope or duration of the job.

Needless to say, this is proving to be a hardship for general contractors and independents alike. The contractor’s typical job is short-notice, and independent contractors are often hired on the same day, leaving no time for a predetermination request to work its way through the Workers Compensation Board. Contractors are paying higher workers compensation premiums to include independent contractors, or risk losing the work due to delays.

Emergency Legislative Relief Considered
The 124th Maine Legislature has taken up LD 1815, in an attempt to clarify subcontractor status and to ease the burden on the day-to-day operations of contractors. While a Predetermination of Independent Contractor Status would still be required, the predetermination would be valid for one year. At least a contractor would not have to have this predetermination for every job. They could keep this form in their files and thereby exclude the independent’s payroll from their workers compensation rating.

We believe the proposal to require a predetermination on an annual basis is a step in the right direction. We hope the Maine Legislature agrees.

For more information and advice about Maine business insurance, Maine workers compensation or for an insurance quote, contact Noyes Hall & Allen Insurance at 207-799-5541.

What Causes Sewer Backup?

1. Sewer lines become full of groundwater or stormwater, and back up, usually through basement drains.
2. Line blockages in the street cause a backup.
3. Tree roots or some other obstruction on your property blocks the line from your home to the street.

How Can I Prevent a Sewer Backup?

The most common protection is to install a backflow valve. This is designed to allow sewage to flow out of your home (“the good way”), but not from the street into your home (“the bad way”). These are sometimes called check valves or flap valves. Gate valves are manually operated, and completely seal the pipe leading from your home to the street. A plumber can recommend the best solution for your home.

What if I Have a Sewer Backup?

1. Call your city’s sewer maintenance department.
2. They will check the line in the street near your house.
3. If the line is not found to be blocked, you should call your plumber.
4. We do not recommend trying to clean your own home after a sewer backup. Call a qualified remediation contractor, such as ServiceMaster Elite, ServPro or other a similar professional.

Is the City Responsible for My Property Damage?

Probably not. The Maine Tort Claims Act holds your city responsible only if they were negligent in maintaining the lines. Most municipalities have strong maintenance programs for their systems. They’re not responsible for people dumping inappropriate items into the system, such as grease, non-flushable items, or debris. If you think that the damage was caused by your municipality’s negligence, contact their legal department.

Does My Maine Homeowners Insurance Cover Sewer Backup?

“Off the shelf” homeowners policies do not cover property damage from backup of sewers or drains. Optional coverage is broadly available from your Maine homeowners insurance agent. For more information about Maine sewer backup insurance, Maine homeowners insurance or other storm insurance, call Noyes Hall & Allen at 207-799-5541.

So far, the damage that’s been reported to us has been mostly trees falling on property and wind damage to buildings, followed by water backup into basements. Many Mainers lost power, which caused their sump pumps to fail, allowing water to back up into their homes.

What kind of damage did you have to your property?

You have  3 possible sources of coverage for tree damage:

• your homeowners insurance property coverage;
• your homeowners insurance liability coverage;
• and your Maine auto insurance policy.

There are also 3 types of financial loss:

• The cost to cut up and haul away the limb;
• The cost to repair damage to your property;
• The cost to repair damage to your neighbor’s property caused by your tree.

You can see how this might get complicated pretty quickly. But there’s more. Consider this:

• Most property policies pay for YOUR damage if the tree or limb damages your building or structure. They also pay to remove the offending tree or limb.
• Most property policies do NOT pay to remove a tree or limb that doesn’t damage anything else. There are exceptions to this rule, depending on which company you’re insured with, and which optional coverages you bought.
• Liability coverage pays for your “legal liability” for damage to someone else’s property. You have to be considered “negligent” for coverage to apply. Just because it was your tree that fell on your neighbor’s fence, that doesn’t mean you did anything wrong. Liability could depend on the condition of the tree before the storm, among other factors.

Put all of these factors together, and you can understand why there’s no quick answer to “am I (or my neighbor) covered when a tree falls in my yard”. Your best bet is to call your agent, and get their opinion of your unique situation.

4 Pieces of Advice
While every situation’s different, these should apply to most situations.

• Take photos of the damage or the fallen tree or limb.
• Take immediate steps to protect your property from additional damage.
• Make arrangements to have the tree removed. No need to wait for an adjuster to see it.
• Remember, there’s a difference between the law and being a good neighbor.

If you’re not legally responsible, and your liability doesn’t cover their damage, their homeowners policy will probably cover it. But, they’ll have to pay their property deductible. In the interest of maintaining good relations, you and your neighbor may want to talk about cost sharing.

Good luck weathering the storm!

Whether you have questions about your insurance, or would like a Maine home or car insurance quote, our local, experienced insurance agents are here to help. Contact a Maine insurance professional today at 207-799-5541.