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Augusta, Maine -

Superintendent of Insurance, Mila Kofman, is encouraging Maine residents to begin 2009 with a review of their insurance policies in order to ensure appropriate coverage and save money. She noted on Friday that a weak national economy, rising unemployment and falling home values have important ramifications for insurance consumers nationwide—but provide opportunities to save on insurance costs.

“Many households entered the New Year with a smaller budget and a need to save money,” Superintendent Kofman commented. “Mainers should take time this month to review their insurance needs and take advantage of opportunities to maximize their coverage, minimize their costs and protect themselves financially.”

Superintendent Kofman outlined a number of considerations to help consumers acquire or maintain adequate coverage while potentially saving money:

1. Review Your Insurance Costs. Homeowners looking for ways to save money in 2009 should start with their homeowner policy.
   • Insure your home, not the land: Homeowners policies do not provide protection for your land, so make sure the value of the land is not included as part of your coverage amount.
   • Make sure you are receiving all the discounts you are entitled to: Discounts are typically given to people who have more than one policy with the same insurer; have security or safety systems, such as smoke detectors, deadbolts and fire alarms; are 55 or older and retired; or live in homes located in eligible homeowners associations. Some insurers even offer discounts if all residents of the home are nonsmokers.
   • Consider increasing your deductible: If your deductible is $250, raising it to $500 should decrease your premiums. Raise it to $1,000 and you could save even more. Just two caveats: 1) Make sure you can pay the higher deductible if disaster strikes; and 2) Check with your lender as some home loans have a clause that specifies a maximum property insurance deductible.
   • Make home improvements: Upgrading your electrical, plumbing and heating systems could improve the safety of your home and, therefore, reduce your premiums.
2. Newly Unemployed Face Maze of Health Insurance Options. With 1.9 million2 lost jobs in the first 11 months of 2008, many people are already struggling to maintain health insurance coverage—and those numbers are expected to increase in 2009. A variety of choices exist, but it is important to examine options early, as some expire within weeks of losing a job.
   • Spouse’s plan: A spouse’s plan is typically the most affordable option, but you have to act quickly. You should request special enrollment within 30 days of losing coverage from you previous employer’s plan.
   • COBRA: Rights and entitlements under the Consolidated Omnibus Budget Reconciliation Act (COBRA) guarantee access for continued coverage for 18 months if you purchase insurance through a large employer. You have 60 days to elect coverage. COBRA coverage can be expensive because you are required to pay the full premium, but it is also retroactive once you elect it, so consider using those two months to evaluate other health insurance options.
   • Government plans: Check to see if you are eligible for insurance through a government program, such as Medicaid or Medicare.
   • Private plans: Consumers should contact the Bureau of Insurance for information.

Additional Bureau of Insurance “Savings Strategies” are listed below. More information is available online at www.maine.gov/pfr/insurance or by calling the Bureau toll-free at 1-800-300-5000 (TTY for hearing impaired: 888-577-6690). Questions can also be sent to the Bureau at Insurance.PFR@maine.gov.

• Comparison Shop – premiums can vary significantly from company to company. Be aware, however, an early cancellation fee may apply if a policy is cancelled early. A new policy may also be subject to cancellation during its initial review. Discuss with an insurance agent.
• Consider One Company – discounts are generally applied for having home and auto insured with the same carrier. Auto/Home package policies can result in even greater savings. Multi-vehicle discounts are also applied when more than one vehicle is on the same policy or with the same company.
• Check Policies for Accuracy - check policy information for accuracy to be sure charges accurately reflect what is being insured. Insurance agents are available to explain policy language and charges.
• Change Driving Habits or Vehicle Use – commuting shorter distances or carpooling may result in lower rates, but only if the insurance agent or company is notified.
• Maintain a good driving record - drivers who are free of at-fault accidents or driving violations are often charged lower rates.
• Consider Insurance Costs When Buying Vehicle - insurance expenses should be considered before purchasing a car. Premiums vary from vehicle to vehicle, depending upon how costly a vehicle is to repair or how well it protects its occupants. Sporty or powerful vehicles often cost more to insure than other vehicles, sometimes significantly more. A more expensive vehicle also has higher insurance costs.
• Reduce Number of New Credit Cards or Loans - most insurance companies use an insurance credit score as a rating variable. As few as two new credit cards in a two-year period may adversely affect homeowners and auto insurance premiums. That new store card to get 15% off today’s purchase may not be such a great deal when insurance policies are renewed. Always keep in mind that credit score can impact insurance rates favorably or unfavorably.
• Consider Protection Options, if Domestic Partners – a partner could be listed as a secondary driver on an auto insurance policy. Make sure both names are listed on any deeds, mortgages and homeowners policies, and check to ensure that both partners’ belongings are covered. Many companies now offer health insurance to domestic partners, but coverage should be confirmed directly with the health insurance company before enrolling. Consider creating a healthcare proxy or power of attorney document to specify a domestic partner as having authority to make medical decisions if you are unable to do so, and to allow for hospital visitation. A domestic partner can be named as the recipient of a life insurance policy and as a beneficiary in a will.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its web site at www.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.

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Last Updated: October 28, 2009 1:24 PM