The State of Maine utilizes various types of vehicles to conduct its business - cars, trucks, buses, trailers, ATVs, snowmobiles, motorcycles, as well as emergency and construction vehicles. Sometimes the State borrows or leases vehicles to meet its needs. Sometimes employees use their personally owned vehicles to conduct State business. While the majority of the State's business is conducted within Maine's borders, some is done in other states and Canada. Thus drivers can be subject to various state and Canadian laws as it relates to the State's ownership, use and maintenance of vehicles. In addition, the State's investment in the purchase of vehicles and their equipment is significant. All of these represent exposures to loss for which insurance may be needed.
There are two types of vehicle insurance available through the Risk Management Division to cover most, but not all, of your organization's vehicular exposures to loss. The first is vehicle liability insurance and the second is vehicle physical damage insurance, often referred to as comprehensive and collision insurance.
Vehicle Liability Insurance - In General
The Maine Tort Claims Act (Title 14, Chapter 741, 8101 - 8118) says that the state is liable for its negligent acts or omissions in its ownership, maintenance or use of any motor vehicle, special mobile equipment, trailers and snowmobiles. The Act also establishes a limitation on damages of $400,000 per occurrence.
Renewing each September, the vehicle liability self insurance program provided by Risk Management pays up to $400,000 per occurrence for the defense and indemnification of third-party claims of bodily injury and property damage against the State and occurring in Maine. For collisions occurring in other states or in Canada where the Act may not apply, Risk Management provides a higher limit via a commercially purchased policy. There is no coverage in Mexico or any other country.
Vehicle Liability Insurance - State/Agency Owned Vehicles
This insurance not automatic. This means that each agency owning one or more vehicles must report to Risk Management certain vehicle information in order for this insurance to be in force. Once this is done, all the agency's owned vehicles are insured, even if subsequently acquired during the policy period. The annual premium charged to agencies for vehicle liability insurance is based on a few different factors, such as the type of vehicle, the State's overall loss experience and vehicle usage - either full time or seasonal. The premium derived is then adjusted for each individual agency. Agencies with a poor loss record may pay up to 7% more and agencies with good experience may be credited up to 5%. Controlling losses can pay off!
Vehicle Liability Insurance - Leased Vehicles
This section does not apply to vehicles leased from the State's Central Fleet Management Division (CFM), or the Department of Transportation's Motor Transport Services as those vehicles are State-owned and the preceding paragraph applies. For any other leased vehicle, Risk Management Division may or may not be able to provide vehicle liability insurance. For more information on insuring leased vehicles, check out this link to the Risk Management Bulletins and review the bulletin titled "Rental Vehicles, insuring guidelines" or call the Risk Management Division.
Vehicle Liability Insurance - Employee Owned Vehicles
When employees use their personally owned vehicles to conduct State business, their own personal auto insurance company holds the primary responsibility for responding to vehicle liability claims. The limit of liability insurance purchased is solely the employee's personal decision. It is likely that many employees do not purchase a liability insurance with a limit of at least $400,000, the amount that the State can be sued for. To insure this potential gap, agencies may purchase optional insurance from Risk Management called “Non-Ownership Vehicle Liability”. This is excess insurance that responds only after the employee's own personal insurance limit is exhausted. It is relatively inexpensive, it is not mandatory and it is not automatic.
Vehicle Physical Damage Insurance
This insurance covers the actual vehicle for most (but not all) sudden and accidental loss or damage. It is neither automatic nor mandatory. Agencies can choose to insure some, all or none of their vehicles. They can choose to insure against just comprehensive (non-collision) losses or against both comprehensive and collision losses. Only State or agency owned vehicles or vehicles leased for a period of 30 days or more are eligible for this insurance. Employee owned vehicles are not eligible. Furthermore, only vehicles specifically reported, rated and listed on the policy are covered. For each vehicle insured, Risk Management needs this information: year, make, model, serial number and original cost new. Losses are adjusted on an actual cash value basis. This means that it is not replacement cost coverage - depreciation may be factored into any loss settlement. The per loss deductible is generally $250.
Additional Vehicle Insurance Information
The State is exempt from the requirement to carry insurance cards in State vehicles in Maine. We do recommend, however, that a current insurance card be in any vehicle driven outside of Maine. Cards can be obtained from either CFM or our office.
Every vehicle insured under the State's self insurance program should carry a yellow incident/accident report form. These forms can be obtained from our office, CFM or you can download a copy from the publications page where you can find the "State Vehicle Accident Report (form) and State Vehicle Accident Report (instructions)".
Risk Management is often asked who is insured to operate vehicles under the vehicle liability insurance program. For answers to this question, type in “operate vehicle” in the RMD Web Page Search field and check out the bulletins, form and FAQ on this topic. You may also call Risk Management Division for clarification or additional information.
Some union contracts permit personal use of State vehicles when such usage is in accordance with the provisions of the applicable contract and with the agency’s operating rules and procedures. Coverage for this exposure is available through Risk Management, but it is not automatic. When personal use is permitted but it is not governed by union contract, insurance is likely not in place and Risk Management Division should be called for insurance advice. Even when personal use of State vehicles is permitted and insured, operation is restricted to State employees.
For additional information on preventing vehicle collisions, check out our free employee defensive driving classes.
Don't be caught short. This is the line of insurance that generates the most claims for the State of Maine. Call us with any questions you may have or to place vehicle insurance.