For more information, visit our section on Auto Claims.
What is the appraisal clause?
Most personal automobile insurance policies and all homeowner insurance policies have an appraisal clause. This allows disputes between the policyholder and insurer over the amount of loss to a vehicle or property to be resolved by appraisal. You and your insurer each choose an appraiser at your own expense. Each appraiser states the actual cash value and the amount of the loss. If they cannot agree on the amount of the loss, the parties then choose an umpire to make a final decision. The parties share the umpire's fee. Appraisal is not available if your dispute is with another person's insurer. In that case, it may be necessary to resolve the dispute in court.
Insurers are not required to put new parts on used vehicles. You do have the final choice which parts will be used to fix your vehicle, but the insurer is not obligated to pay for the more expensive original equipment manufacturer (OEM) parts; you will have to pay the difference. In addition, replacing old parts with new is considered "betterment," as you are put in a better position after the repair than you were to begin with, and companies are allowed to deduct for this. As an example, consider a vehicle with 75,000 miles that is involved in an accident. As a result of the accident damage, the transmission must be replaced. Assuming the standard life of a transmission is 150,000, replacing the damaged transmission with a new one is a betterment of 50%, thus an insurer may only pay for 50% of the cost of the new transmission.
My vehicle has been totaled; is it appropriate for me to cancel the policy until I decide to replace the vehicle?
If you are still operating a rental vehicle, you should maintain your insurance policy as you need insurance for the rental vehicle. Under Maine law, your policy must provide coverage for damage to a rental vehicle for the same coverages as on your insured vehicle. If you are anticipating a lengthy period before replacing the vehicle, see your agent to discuss the proper action. Please be aware that once your policy has terminated, you may lose any accrued credits you had with the insurer. In addition, the same insurer will not be obligated to issue you a new policy.
I was in an accident caused by someone else. Their insurance company will not pay for some (or any) of my damages. Can the Bureau help me with this?
The Bureau will investigate whether the company has unfairly handled your claim or otherwise violated Maine's insurance laws. The Bureau imposes penalties for violations of the insurance laws, but its examiners do not decide such factual issues as whether you or the company's customer is responsible for the accident. Third party losses are often paid on the basis of comparative negligence, in which damages may be reduced by the extent to which your actions contributed to the accident. These situations tend to be hard to resolve without going to court or another dispute resolution process, particularly where there are no independent witnesses whose account clearly supports one side over the other.
I backed into my wife's car, and both vehicles were damaged. Now the company is requiring that we pay for two deductibles. (Or – the company will only pay the damage for one vehicle.) Is this correct?
Yes. Although some auto policies may contain a special enhancement stating that only one deductible applies if more than one insured auto is involved in the same loss, the standard policy applies the deductible per vehicle. If you backed through your garage door, both your auto deductible and your homeowners deductible would apply: one to the damage of your vehicle and the other to the damage of the structure.
If the vehicle you hit did not have collision coverage, your policy will not pay to repair it. Your liability coverage does not cover damage you cause to your own vehicle.
"Diminished value" is the expected loss in the value of a vehicle resulting from the fact that it has been involved in an accident in addition to the cost of physically repairing the vehicle. Maine has no specific law addressing the payment of diminished value. Most insurance policies limit payment for damage to the insured vehicle to the cost of repair or replacement, but not more than its actual cash value. The Maine Supreme Judicial Court has ruled that a policy which only provides coverage to repair or replace the vehicle it insures does not cover the diminished value of that vehicle. If you have a third-party claim against someone else’s insurer for damage to your vehicle, the vehicle’s loss in value might be part of that claim. You may want to get advice from an attorney experienced in motor vehicle damage claims about how to prove the loss in value.
If you purchased comprehensive coverage under your auto insurance policy, you may have coverage available. Contact your insurer or agent for specific claims information.
In a first-party claim, your contract requires you to cooperate with your insurer in the investigation of a claim, and also to submit to examination under oath if required. This is more formal than a recorded statement. Failure to submit to an examination under oath or refusal to participate in a recorded statement could be considered failure to cooperate with the insurer and result in denial of the claim.
In a third-party claim, you have no such contractual obligation, but refusal to provide information in the manner the insurer has requested could also lead to denial of the claim.
In a first-party claim, generally the insurer will accept direct billing and will have one or more rental agencies on contract. In a third-party claim, however, the company has no obligation to provide you with a rental. Maine law only requires reasonable rental expenses to be reimbursed, although many companies will make arrangements for direct billing.
You are not required to use a repair shop recommended by the insurance company. This includes auto glass shops as well as body shops. If your chosen shop charges more than the company's suggested shop, however, you may have to pay the difference. The adjustment process may also be streamlined using a suggested shop, thus reducing the amount of time to complete the repairs.
The company determined my vehicle was totaled, but I want to keep it and repair the damage. The company is telling me I have to turn the title over to them and then receive a salvage title. Is this correct?
Yes. Motor vehicle law (29-A M.R.S.A. § 667) requires an insurer to apply for a salvage title after a vehicle has been declared a total loss. The insurer then transfers the salvage title back to you. Once the vehicle is repaired, application for a new title must be submitted to the Bureau of Motor Vehicles. The title will be branded ( as "repaired," "rebuilt," or "rebuilt salvage") according to the nature and extent of the repairs.
Once you have supplied the insurer with proof of your loss, the insurer generally has thirty days to either pay or dispute your claim. The insurer may also ask you for additional information, in which case its time to pay or deny your claim is extended to thirty days from the time it receives the requested information. Overdue claims payments are subject to interest.
There is no specific requirement in the Maine Insurance Code addressing time for payment of a third-party claim.
The company has indicated it will not pay any more storage fees and I have to take my car or pay it myself. Can they do this?
The company is not obligated to pay for storage fees that continue to accrue while you try to resolve a disputed claim. It is recommended that you move the vehicle to a location that will not incur such fees while a dispute is being negotiated or litigated.
When is a vehicle determined to be a total loss? How is the total loss value determined? What if I owe more than the vehicle is worth?
It is the insurance company's option to declare a vehicle a total loss when the repair cost approaches or exceeds the actual cash value (ACV) of the car. Most companies consider a total loss when the initial estimate reaches approximately 75% of the ACV, as hidden damages are generally discovered after the repair process has begun. Maine law does not require any specific method for establishing the value, and companies may use (singly or any combination of) published valuation guides, market surveys, or independent valuation services. Conditions such as prior unrepaired damage, rust and high mileage will reduce the value of the vehicle.
If you disagree with the insurer's value, you can conduct your own search of local dealers, advertisements, and reference guides to use as a negotiation point. If you are making the claim under your own policy, you may request an appraisal as explained in your policy. You and the company will each hire an appraiser, and if necessary, the two appraisers will select a neutral "umpire" whose cost is split between you and the company. The appraisers will provide their own estimates of the loss. If they cannot agree, the figures will be presented to the umpire, and an agreement by any two of them is binding. This process can also be used for a dispute with your own insurer over the amount of repairs when a total loss is not involved.
If you owe more for the loan on the vehicle than the actual cash value, you are responsible for the difference unless you have purchased a special coverage - generally called GAP coverage - for this exposure.