For more information, visit our section on Homeowners Insurance.
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.
During the first 90 days of a new policy, an insurer may decide to cancel a policy for any reason that is not otherwise prohibited by Maine law. For example, the law prohibits refusal of insurance solely on the basis of the applicant's age (age 65 or older), credit information, losses under a home's prior owner, or the age of the dwelling. Any cancellation notice received by the insured 90 or more days into the policy, however, is considered a mid-term cancellation and must be based upon one of the permitted grounds in the Maine Property Insurance Cancellation Control Act (24-A M.R.S.A. §§ 3049, 3050, 3051). These grounds are as follows:
- Nonpayment of premium: Your premium is due on or before the date shown on your bill, depending on its wording. If payment is not received by the date indicated, the insurer has the right to cancel your policy. There is no "grace period" in Maine law for payment of any property or casualty insurance premiums.
- Conviction of the named insured of a crime having as one of its necessary elements an act increasing any hazard insured against: This may include convictions for arson-related acts, assault, terrorizing, and drug-related activities.
- Fraud or material misrepresentation by the insured in obtaining the policy or by the named insured in pursuing a claim under the policy: Concealing information that would affect the insurer's decision to accept your application or providing false information relating to a claim could result in cancellation of the policy.
- Discovery of negligent acts or omissions by the insured substantially increasing any of the hazards insured against; or failure to disclose a material fact in relation to the application.
- Physical changes in the insured property that result in the property becoming uninsurable.
- The insured property is vacant and custodial care is not maintained.
- The presence of a trampoline on the premises 30 or more days after the insured has been advised that the policy will be cancelled if the trampoline is not removed.
- The presence of a swimming pool on the insured property that is not fenced in accordance with 22 M.R.S.A. § 1631 if the pool remains in noncompliance for 30 days after notice by the insurer of the defective condition and intent to cancel the policy.
- A loss occasioned by a dog bite unless the insured removes the dog after notice of cancellation or nonrenewal is received.
- Failure to comply with reasonable loss control recommendations within 90 days after notice from the insurer.
In addition, a policy may be nonrenewed for any reason that would support cancellation, as well as for any good faith reason that is related to the insurability of the property. A named insured who has received either a mid-term cancellation notice or notice of nonrenewal may request a hearing. Please see the FAQs relating to Hearings for more information.
What effect will repeated cancellation for nonpayment have on my ability to find coverage in the future?
You could be refused coverage altogether, or insurers might require that you submit most or all of the premium in advance with a bank check or money order.
Depending on the type of policy, you may be required to pay a minimum premium, or the premium may be fully "earned." In other instances, if you replaced your coverage with a different company, during the policy term, you may be subject to a "short-rate" penalty, which is usually about 10% of the unearned amount. You might also have some premium due for recent changes in coverage. The company should be able to provide a detailed billing history that explains the return-premium calculation.
Why is the insurance company withholding part of my claim payment - what is ACV and Replacement Cost? It has been more than 180 days since I accepted my ACV payment, can I make a supplemental claim for replacement cost now?
ACV, or actual cash value, is an item's current value, considering its depreciation and obsolescence. Replacement Cost coverage is the amount it would cost to buy a new item that is identical or nearly identical to your damaged property. Insurance policies which provide this coverage contain a requirement that you actually purchase the new item before receiving full recovery. You will usually receive an ACV payment until you replace the property. You generally have 180 days from the time you receive your ACV settlement to submit a supplemental claim for the extra amount.
My insurer has determined an amount for repairing the damage to my home, but my contractor says it will cost more.
If you disagree with the amount of damages, 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 only applies to the amount of damage, and not when the dispute regards what is covered by the policy. A dispute involving the application of coverage generally requires litigation if the parties cannot reach an agreement.
After a loss, my family had to move out of the house while repairs were being made. I thought the policy covered the living expenses, but my company will not pay the entire amount.
If your dwelling is uninhabitable as a result of a covered loss, the policy will cover your additional living expenses for the shortest amount of time necessary to repair the damage. While you are out of your home, some of your usual expenses may be reduced or eliminated. In addition to providing documentation of the additional living expenses, you must document your regular expenses in the past and compare them to current expenses. The policy covers the amount of reasonable expense in excess of your regular expenses.
Your policy 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.
Most homeowners policy contracts require you to carry 80, 90 or 100% of the replacement cost of your home; that is the amount to rebuild the same structure in the event of a total loss. This means that once the replacement cost of your home is established, you must carry no less than the required percentage of that amount in order to avoid insurance-to-value penalties on partial losses. For example, if the policy has an 100% coinsurance clause and the dwelling's replacement cost is $100,000, you must insure the dwelling for at least $100,000 to recover the full amount of any loss. If you have insured the dwelling for dwelling for less than the required amount, you will be responsible for a percentage of the loss. In this example, if you insured the dwelling for $80,000, you would be carrying only 80% of the limit required by the policy. The policy would cover only 80% of any covered loss, less the deductible.
My policy shows that my deductible is now 1% of the Coverage A (dwelling limit). What happened to the $500 deductible per claim that I used to have?
As a result of rising claim costs, some insurers have replaced the standard flat rate deductible with a stated percentage of the dwelling limit. This change increases the deductible and is meant to keep premium levels down. This deductible may apply to all claims, or it may be restricted to losses caused by certain specified perils. If you have a limit of $80,000 on your policy, the deductible for the applicable losses would be $800; if the limit is $150,000, the deductible would be $1,500. Some insurers offer a "buy back" of the flat deductible for a higher premium.
My home has suffered flood damage as a result of heavy rains causing a nearby body of water to flood the area. Is it covered under my homeowners insurance?
Flood damage or damage caused by rising stream, river or lake levels, or rising ground water typically will only be covered if you purchased flood insurance through the National Flood Insurance Program (NFIP). This type of damage is not covered under a typical homeowners or renters insurance policy. Policyholders should first contact their agent for their homeowners or renters insurance policy to report flood damage. "Tips for filing claims" are available under the "Site Map" and then by clicking "Floods Happen" at www.floodsmart.gov. NFIP coverage information is available for various audiences at http://www.fema.gov/business/nfip.
Yes. The insurer is entitled to be familiar with the property being insured. Most inspectors will call for an appointment, especially if they want to inspect the inside of your home. If an insurer issues "loss control recommendations" as a result of the inspection, you must make the necessary repairs or changes to make the property insurable and to reduce the chances of loss. If you do not comply with these recommendations, the insurer may cancel your policy (see the cancellation FAQ above).
The company is charging me an additional amount on each bill for an "installment fee." Is this legal?
Maine law does not require an insurer to provide installments in lieu of requiring payment in full at the beginning of a policy. Installments are offered for the benefit of policyholders, and result in an increased cost to the insurer. These nominal fees are permitted.
The Maine Department of Environmental Protection has a 24 hour hotline for oil spill assistance. The telephone number is 1-800-482-0777. In addition to technical assistance, DEP has a financial assistance program for qualifying persons.
The agent quoted me a premium for a new policy, which I accepted, but the policy came in at a higher rate. Doesn't the company have to honor the quote?
No, the company must calculate your premium in accordance with its current rates that have been filed with and approved by this Bureau, even if the agent quoted a lower premium. The agent's quote could have been in error, or the information you provided to him may have been incomplete or incorrect. Companies order claim reports and credit reports, each of which may affect the final premium, and may contain information that was not available to the agent at the time of the quote.
Renters insurance is for anyone who rents an apartment, condo or house, instead of owning the premises. The policy provides protection for your personal property, such as furniture, electronic equipment and clothing. It also provides liability protection for you should you negligently injure someone or damage that person's property. Your landlord or the owner of the property is responsible for insuring the building and for his/her own liability coverage.
The insurance your landlord carries covers the building structure, but does not cover your personal belongings--your furniture, wardrobe, appliances, television--anything that you've moved into the building. You need a renters policy to cover your personal possessions.
My roommate lost personal property when our apartment building burned. I have a renters policy, but the company won't pay his/her claim. Is this legal?
Yes. Under your insurance policy, only people who are related to you and residing with you have coverage for their belongings. Your boyfriend/girlfriend needs his or her own policy. He or she also should buy a policy for protection against liability claims, which is a coverage provided under a renters policy.
My roof leaked and caused water damage inside the house. My company is covering the water damage, but is refusing to replace the roof. If it is not replaced, it will just continue to leak; why isn't it covered?
The policy covers damage from a covered cause of loss – in this case, the water damage. Most policies, however, exclude coverage for loss caused by wear and tear or deterioration. If the leakage is resulting from old and deteriorated shingles, the condition of the roof would not be covered by the policy. It is the owner's obligation to take care of such maintenance issues.
All my compact disks were recently stolen from my car. My insurance company advised there is no coverage for these items in either my auto insurance or my homeowner's insurance policy. Is this true?
Almost all auto and homeowner's policies exclude coverage for any losses of tapes, disks and other sound transmitting or receiving equipment used in an automobile. Some insurance companies however, will provide coverage for these items for an additional premium. Check with your agent to determine if coverage can be purchased for the stereo, tapes and disks used in your auto.
My home was recently broken into and I do not have sales receipts for the stolen items. What will the insurance company accept for proof of ownership?
If the actual receipts are not available, insurance companies generally will accept photos, warranties, owner's manuals, canceled checks, credit receipts, bills, servicing agreements, or video tapes, as proof of ownership. It is very helpful to prepare some type of inventory of your possessions. You might consider taking pictures or video taping your possessions now, before something happens to them.