The State of Maine owns and leases various types of property including buildings and business property, electronic equipment, machinery, outdoor structures and fixtures.
There can be a significant financial investment in the purchase and ownership of property and insurance is available through our office to protect this investment from sudden and accidental loss. Risk Management Division currently insures over $3 billion dollars in property for State and Quasi government, the Community College System and others.
Property insurance is not automatic, nor is it mandatory. Agencies can choose to insure their property or not. Leased offices and equipment may require property insurance to be carried. Agencies desiring property insurance for any reason must contact Risk Management Division to arrange for it, it is not automatically provided.
Renewing each July 1st, the State's property insurance program is a combination of commercial property insurance and self-insurance. Risk Management Division purchases a commercial property policy with a very high limit of coverage. In order to generate significant premium savings, the commercial policy has a $2,000,000 per occurrence deductible. Using a self insurance policy, we then reduce this down to a $1,000 per occurrence deductible, which becomes the responsibility of the agency suffering the loss.
The premium charged to agencies for property insurance is a rate per $1,000 of insured property value. This rate is actuarially determined using actual past and predicted future losses and the cost of the commercial property policy. The rate derived is then adjusted for each individual agency. Agencies with a poor history of preventing property losses may pay up to 10% more. It pays to control losses!
Like any other insurance policy, the property insurance policies contain certain sub limits, limitations of coverage, exclusions and conditions. It doesn't insure every type of property, every loss at every location, and for every cause of loss. It provides replacement of damaged property, without depreciation, in most cases. Agencies are generally required to replace the damaged property in order to collect insurance proceeds. Payment for a loss is capped by the limit chosen and paid for by the agency. It is very important for an agency to review and keep its values current.
IN GENERAL
We cannot possibly capture all of the nuances here. Call us for insurance advice if your agency:
- Has never purchased property insurance from our office.
- Renovates an existing building.
- Purchases either a building or new business equipment.
- Contracts for a new building to be built.
- Sells or vacates a building.
- Moves to a new location.
- Loans State-owned equipment to other non-state entities or individuals.
- Needs proof of property insurance.
- Suffers a property loss.
- Installs an EV station, generator, fencing or solar units.
- Roof Inspection guidance or other maintenance concerns.