Author: Bob O'Brien

How to Compare Car Insurance Quotes

Posted on by Bob O'Brien

It’s a good idea to compare car insurance quotes periodically. Rates change frequently. The company that was the best value years ago might no longer be.

Car insurance is a big item in many budgets. Saving 5 or 10% can mean $100 or more. So what’s the best way to shop for car insurance?

Step 1: Gather Information from Your Policy

You’ll need:

  • Vehicle description, including VIN;
  • Driver information (dates of birth, license numbers);
  • Details about claims, accidents or violations in the last 5 years;
  • Current coverage limits and deductibles.

Step 2. Decide Where to Get Your Quotes

You have 3 basic options for insurance quotes:

  • DIY – go online or call an 800 number. You’ll get one quote at a time from a company like GEICO or Progressive. You’ll need to call a few agents to get comparison quotes.
  • A company agent, like Liberty Mutual, State Farm or Allstate. You’ll still get only one quote. That means you’ll have to call several to compare. But unlike the DIY option, an agent will be able to offer custom advice and answer your questions.
  • An independent agent, like Noyes Hall & Allen. They provide custom advice and answers like a company agent, with the added convenience of quotes from several insurers at once.

Comparing quotes from different car insurance companies isn’t easy. Each company’s presentation looks a little different. Some may not offer the coverage limits you asked for. And they may not even tell you that it’s not the same.

Step 3: Compare Car Insurance Quotes

This 6:40 video explains what to look for, and what to watch out for.

How to compare car insurance quotes

We Help You Compare Car Insurance Quotes

If you live in Maine or are moving to the Portland Maine area, a Noyes Hall & Allen Insurance agent can help. We represent many of Maine’s top auto insurers. We can explain coverage and price differences to help you find the best insurance value. We’re independent and committed to you. Call us at 207-799-5541, or start an online insurance quote in 10 minutes.

Test Drive: Auto Insurance Driving Monitor

Posted on by Bob O'Brien

I’ve been testing Travelers’ Intellidrive mobile app. It uses my smartphone to track the quantity, quality, timing and location of my driving. Several insurance companies offer similar apps, including Progressive Snapshot, Allstate and Safeco Right Track. Most offer an up-front discount to try it. They adjust your rates after 6 months to reflect your driving safety.

Travelers allowed me to install Intellidrive without association to an insurance policy. These apps, known as telematics, are becoming more widespread. Clients ask me about them. It’s easier to explain and advise clients if I’ve tried the app myself.

The COVID effect – Are We Driving Less?

Most of us are driving less during COVID time. Insurance companies should give us a break for that, right? Many of them did, with across-the-board refunds in April and May.

But we’re not all driving less. In larger cities, mass transit reductions have forced people to find other ways to get around. Some of us are back to work. Some are working from home; or not working at all. Others are driving even more than before, delivering food or passengers to pay the bills.

The COVID disruption was so fast and intense that insurance companies don’t have a lot of data to adjust rates. That’s why they love these driving monitoring devices.

How Telematics Works

Like most insurance company telematics apps, Travelers Intellidrive monitors:

  • Time of Day
  • Number of Miles Driven
  • Location of Driving
  • Acceleration, Hard Braking and Speed
  • Distracted Driving

It’s usually smart enough to know when you’re a driver vs. a passenger (you can re-classify a trip if the app goofed).

Hit all the targets, and you can earn up to a 20% rate cut with most insurers. High-risk driving will cost you a surcharge. The average rate effect for all drivers is minus 5%. Insurers say 70% of customers get some discount.

The app reports how you’re doing. If you don’t like the early results, you can opt out within 45 days without any penalty. You just lose the up-front discount.

Humans are Bad at Estimating Risk

Telematics are a great way to accurately price insurance to risk. Good drivers pay less. Most of us think we’re good drivers. But are we?

Humans tend to underestimate risk, and over-estimate their own driving skills. Memory is fleeting but data lives forever.

I often talk to people who say they “have a completely clean record”, but reports show otherwise. They’re not trying to lie; they just don’t remember. That time your car was hit in the parking lot? When the deer ran in front of you? Or you had a minor fender-bender but no damage? Those are all “incidents” to insurance companies. Like it or not, they indicate a higher chance of future losses.

What I Like About Telematics

  • I’d probably save money. I’m a low mileage driver. I use my bike for most errands and to commute. Intellidrive allows me to pay lower insurance premiums for reduced driving.
  • It gives good feedback. Intellidrive records “events” that adversely affect my rates. Those can be my fault, like speeding or rapid starts.
    Or they could have nothing to do with how I’m driving, but when. Driving very late or during rush hour is a higher risk.
    This knowledge can be helpful if you want to improve your driving safety. A parent could use it to keep eyes on a teen driver. The app has videos and other driver training tips, too.
  • I’m a data nerd. I like to monitor my sleep and exercise with a fitness tracker. Intellidrive is like a FitBit for my driving. If you like that sort of thing, you’ll like telematics.

Downsides to an Insurance Company Monitoring App

  • It collects a lot of data – for an insurance company. It tracks where and when I drive. That’s useful in calculating a fair price for my insurance. It’s also valuable to others who might want to know about me.
    I know: my smartphone, smart speaker and my Fitbit already have a lot of data about me. I trade my privacy with those vendors in exchange for the utility of the product or service.  
  • The insurance company owns that data. I’m sure the insurance company says “we’ll never sell your data”. But they might sell anonymized data. And data can be hacked. Or used against me if I’m in a crash or legal proceeding.

The Long Term Effect of Telematics

Attitudes about trading data for discounts are changing. More people are choosing to let auto insurers monitor their driving. As insurers gather more data, I expect higher rates for drivers who don’t choose to be monitored. There are two reasons for this:

  • The risk of uncertainty. Insurers set rates based on experience. Telematics allow them to project your chances of loss, tied directly to your behavior. Without that data about you, insurers will want to charge a “risk premium.”
  • Adverse selection. Remember the “opt out” option? If your driving score projects a surcharge, you can bail out within the first 45 days, with no rate penalty. As telematics become more pervasive, underwriters may assume that people who decline monitoring are higher risk drivers – and warrant higher rates.

Would I Sign up for Telematics?

If I could own the data, I’d be all in. I’d like to see a driving app that I control. I want to own my driving data and decide who to share it with. I expect that would cost something. You know what they say: if it’s free, you’re the product.

If I owned the data and wanted to shop my insurance, I could export a report from my app to my agent. They could check prices and recommend coverage. The insurance companies could access my scores, but not my data. That’s the kind of telematics I would sign up for.

But I may do it anyway. Privacy is an illusion in our wired society. My smart speaker probably listens a lot more than I think it does. I share my location via smartphone for the utility of real-time maps, traffic data, and more. And auto insurance is a big-ticket item. Everyone likes to save money.

Are We At the Tipping Point?

Telematics will reach a point where the cost difference will be hard to ignore. It’s probably already there for someone who drives as little as I do. And it may be for you, too, during COVID time.

Do you live in Maine and have questions about low mileage auto insurance discounts? Want to know more about Progressive Snapshot, Travelers Intellidrive or Safeco RightTrack? Contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We offer a choice of preferred auto insurers to help you find the right fit. We’re independent and committed to you.

Adding Outside Dining to Your Portland Maine Restaurant

Posted on by Bob O'Brien

Portland and South Portland Maine recently passed ordinances expanding outdoor seating options for local restaurants. These respond to indications that coronavirus is less likely to spread outdoors. Soon, some local restaurants will be able to serve patrons :

  • on sidewalks
  • in parking lots or closed streets
  • in on-street parklets.

Transitioning a Restaurant to Outdoor Dining

Outdoor dining isn’t for every restaurant. Depending on your cuisine, location, formality and clientele, you may choose not to serve al fresco. If you do, here are some things to consider.

  1. Check city rules and resources. Portland and South Portland city web sites have the ordinances and applications for permits and street closures.
  2. Up your cleaning game. During the COVID threat, you’re already doing extra cleaning and disinfecting. Outside adds new cleaning challenges: pollen, dust, litter and even insects.
  3. Keep it light – and smooth. Make sure there’s enough light for employees and customers to see well. Paint or tape the edge of irregular surface levels. Avoid loose cords and other trip hazards.
  4. Watch the skies. That includes the sun. Plan your seating to avoid excessive sun exposure during meal service, if possible. Summer thunderstorms can develop fast. Have a plan to quickly evacuate your dining area and secure umbrellas and other furniture. That will help avoid injury and damage.
  5. Beware of vehicles. Create barriers between diners and vehicles – including bikes and scooters that might be on sidewalks.
  6. Watch outdoor flames. Keep propane heaters, cooking equipment and other heat sources away from flammables like fabrics and awnings.
  7. Check your insurance. Many liquor liability policies only cover you “on premises.” Does that extend to a parking lot or street? The same with property insurance for your outdoor seating and fixtures. Ask your agent about your insurance coverage.

Do you own a Portland Maine area restaurant, cafe, food truck, brewery or other food service business? Contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We’re local business owners, just like you. We offer a choice of Maine’s top business insurance companies. We’re independent and committed to you.

Doing Insurance Business Safely and Remotely

Posted on by Bob O'Brien

Sometimes, staying apart means staying safe. That includes when you buy insurance, file a claim, and repair vehicles or property.

People value stability in uncertain times. Insurance delivers. You can do your insurance business in a low-contact, safe manner. You don’t have to sacrifice personal advice and service. Here’s how.

GET NO-TOUCH INSURANCE QUOTES

  • Get insurance quotes online. Most insurance agencies and companies offer online auto and home insurance quotes. Enter information about your vehicles and property and get quotes back. A good independent insurance agency can deliver several quotes at once. That helps you compare.
  • Get advice, not just quotes. It’s hard to know if you’re asking for the proper coverage online, or to compare the quotes you receive. That’s why most people prefer to consult an agent before they actually buy a policy. A tech-savvy insurance agent should be available by text, video or real-time chat as well as phone and email.

BUY INSURANCE REMOTELY

  • Read and sign documents electronically with e-mail, text and e-signature. These tools allow you to read and sign applications from anywhere. All you need is a computer or mobile device.
  • Use contactless payment. Most insurers accept credit cards or electronic checks using your bank account info. No need to leave home and go to the insurance office.

AVOID INSURANCE PEOPLE COMING TO YOUR HOME

Many insurers allow customers to complete a self-inspection. That usually involves answering questions about your home’s systems and emailing pictures.

In case of a claim, avoid an insurance company appraiser’s visit. Email or upload photos of your damage to the insurance adjuster.

CONTACT-FREE INSURANCE SERVICE and PAYMENTS

  • Use mobile apps. Most insurers have them. Download and use them to request changes, check on billing, make payments and file claims.
  • Don’t want to use an app? You can do many of the same things over the phone, email, video or text chat with your agent.

GET VIRTUAL INSURANCE COVERAGE REVIEWS

Modern tools allow you to meet virtually with your Insurance agent. They can even share documents with you by video. You can get personal service and answers to your questions quickly and safely, without leaving home.

DOWNLOAD INSURANCE DOCUMENTS

You don’t have to go into the insurance office to get policy documents. Here are some other ways:

  • Your insurance company’s app. Get documents on your mobile device.
  • Register for an insurance company account. Set one up and download the documents to your computer.
  • Use your agency account. Tech-forward insurance agencies offer online access. These allow you to view your policy information and download insurance documents.
  • Ask your agent to email or text your document to you.

FILE CLAIMS FROM THE SCENE

  1. Report online. Use your insurer’s mobile app to start a claim. Or register for a free account with your insurance company, and file online.
  2. Call the insurance company directly to report your claim.
  3. Call your agent who can explain your coverage, answer questions and help you file a claim.

DON’T SACRIFICE PERSONAL SERVICE

One advantage of having a local agent is that we know you and live where you do. That’s more important than ever in this era of physical separation.

Noyes Hall & Allen Insurance is a forward-thinking agency. We’ve invested in tools and ideas to provide personal advice to you easily and safely. Do you prefer text, video, phone, or a combination of all? Any way, you can get a local agent’s trusted insurance advice without venturing to our office.

Are you looking for a Maine insurance agent who can serve you safely in uncertain times? Call a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. Or visit noyeshallallen.com.

Stay safe!

Should You Cancel Workers Comp Insurance When You Lay Off Employees?

Posted on by Bob O'Brien

If a business downturn causes you to lay off employees, you might want to cancel your workers’ compensation insurance. Workers’ comp coverage is required when you hire someone. Without employees, it’s overhead you would like to cut.

But canceling your insurance isn’t always the best move. Here’s why.

Three Reasons Not to Cancel Workers’ Comp Too Quickly

  1. It’s hard to scale up again. Do you expect the downturn to be temporary? You will need to re-apply for workers’ comp when you hire employees again. This costs time, effort and money.
  2. You may lose valuable dividends. MEMIC, Maine’s largest workers’ comp insurer, has paid dividends several years in a row. If you cancel, your business has to wait 3 years to start earning dividends again.
  3. You may lose loss-free discounts. By canceling your policy, you lose the benefit of any loss-free discounts you’ve earned. When you re-start your policy, it takes time to accumulate those discounts again.

Cost-Cutting Alternatives to Canceling Your Workers’ Compensation Policy

  1. Reduce estimated payroll. Workers’ comp premiums are based upon payroll amounts. Layoffs mean lower payrolls, so it’s fine to reduce estimates. This may create a refund without actually canceling your policy.
  2. Change payment plans. Most workers’ comp insurers offer installment plans. Spreading payments may allow you to better match cash flow without losing benefits.

Updating your Maine workers’ comp policy may be smarter than canceling it altogether. Closing your business, or have no plans to hire for more than a year? Then it’s proper to cancel your workers’ comp insurance.

Maine Workers’ Compensation Insurance Questions?

For answers to your Maine workers’ compensation questions, contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We’re independent and committed to you.

Does Insurance Cover Loss of Business from Coronavirus?

Posted on by Bob O'Brien

UPDATED 4/2/2020

COVID-19 (Coronavirus Disease), has everyone’s attention. It’s changed behavior around the world, and now it’s here. Business owners feel it. Emergency declarations have forced many to close for the duration.

For those businesses remaining open, routines and procedures are completely disrupted. No more non-essential shopping, eating at restaurants or going to shows. No going out for drinks or coffee. Instead, people are stockpiling supplies, staying home, washing, disinfecting and keeping their distance.

COVID-19 is causing turmoil for businesses large and small. Inventory control and staffing are all messed up. Marketing and sales are on hold as clients and prospects are otherwise occupied.

What if Your Business Suffers due to Coronavirus?

Many businesses feel threatened.

  • What if fear causes my customers to stay home?
  • What if I can’t get inventory or supplies?
  • How can I keep my employees safe?
  • What if my employees get sick and can’t work?
  • What if I have to disinfect or close my workplace?
  • The government has restricted movement in my area.
  • What if economic fear or market changes cause me to lose sales?

Do My Policies Cover Business Interruption?

Unfortunately, business insurance is very unlikely to cover you against lost business due to Coronavirus. Even policies that provide “”business interruption” coverage exclude damage caused by communicable diseases. They also require physical damage to your premises by a covered peril, like fire or water.

If Not, Why Not?

You probably don’t care about the reason behind the exclusion, but there is one. Put simply, diseases are too uncertain for insurers to accurately price insurance to cover them.

Insurance companies have a lot of experience with fires, hurricanes, and other disasters. They know how to price insurance for that, and they know that these perils are local or regional in scope. They can collect enough premium from everyone to pay for the few who suffer a loss.

Viruses are extremely rare – or even unknown – until they’re widespread. And it’s hard to quantify a resulting drop in business. Profits and sales are subject to changing factors: weather, competition, consumer preferences. It’s very hard to put a dollar value on lost sales directly caused by a public health threat.

Should I File a Business Interruption Claim Anyway?

Although the chances of coverage are very small, each business situation is unique . Coronavirus is new for everyone. Insurers are trying to deal with it just like everyone else. Coverage interpretations and response may evolve.

No one wants to file a claim, only to have it denied. But, you may choose to anyway. Here are two reasons why it might be a good idea to file a claim with your insurer.

  1. By contract, insurance companies must investigate each claim to determine if coverage applies. If they find that coverage does not apply, they must show the wording in your insurance policy that precludes it.
  2. The government could create a relief program in the future that might apply to your loss of income. Government could also force insurers to create coverage, in spite of policy wording. Such government actions would probably require you to prove your loss. You might also have to show that your insurance policy provided no coverage for the incident.

Resources for Small Businesses Affected by COVID-19

Congress passed the CARES Act in March, 2020 to help people and businesses weather the economic effect of Coronavirus. This Small Business Owners Guide to the CARES Act provides a good recap of the bill. It tells you how to apply for benefits, which are widespread. We encourage our affected clients to apply early if they’re affected.

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million. The goal is to help small businesses overcome a temporary loss of revenue.  These are loans, not grants. They must be repaid.

The Maine CDC Coronavirus information page is a good resource for Maine businesses and citizens. It contains factual and timely information about the disease and its effect on our state.

We’re Here to Help our Neighbors

We are a local business. We live and work in Greater Portland. While insurance may not be able to help our clients directly, we still want to be accessible. We want to help where and how we can.

While our office is closed to the public, we’re available by phone, email or our website. Our insurance company partners also continue serving customers while keeping their employees safe.

Stay Safe

Public health scares and economic uncertainty create anxiety. Most business owners feel responsible for the safety of their employees and customers, as well as their loved ones.

We hope that all or our clients, friends and business partners remain safe and calm during these trying times. We’re here to answer your insurance questions.

In this anxious season, check on family and friends. Be kind to each other. Together, we can make it through.

Independent Contractors and Maine Workers Compensation

Posted on by Bob O'Brien

Hiring an independent contractor a great way to expand your company’s products and services without adding overhead. The right sub can make you look good.

Subcontractor or Employee?

By Maine law, a worker is an employee unless they meet tests to be an independent contractor. That makes them subject to employment tax and workers compensation. If your Maine business hires independents, here’s what you need to do.

Get Documentation from Subcontractors

Workers compensation charges sub costs as payroll unless you have proof of subcontractor status. That can be a very expensive surprise. And the bill is due in lump sum.

Reduce Your Maine Workers Comp Costs

Certificates of insurance and WCB266s are “get out of jail free” cards. Use them to avoid a costly workers compensation insurance audit.

For more Maine Workers Compensation insurance tips, contact Noyes Hall & Allen in South Portland at 207-799-5541. We’re independent and committed to you!

What is Homeowners Equipment Breakdown Coverage?

Posted on by Bob O'Brien

Maine home owners have a lot of things to worry about. Adding Equipment Breakdown Coverage to your homeowners insurance can help with some of the big ones.

Most homeowners policies cover fire, wind damage, and water damage from plumbing leaks. Other big expenses aren’t covered by basic homeowners insurance. Off-the-shelf policies exclude flooding, foundation leaks, and breakdown of systems and appliances.

But many home insurers now offer a homeowners Equipment Breakdown Endorsement. Some insurance companies call it Home Systems Protection, but it’s the same thing.

Equipment Breakdown Coverage can help with expensive repairs

What Does a Mechanical Breakdown Endorsement Cover?

Your insurance company’s form may differ. But most cover the cost to repair or replace items hit by mechanical or electrical failure. Think heating systems, solar panels, appliances, electronics, IOT smart devices and more.

Some examples

  • Your expensive dishwasher breaks down when the motor burns out.
  • A central air conditioner compressor fails.
  • The boiler or water heater break.
  • Your smart home monitoring system stops working.
  • The solar panels on your roof stop generating electricity.

What’s the Coverage Limit on Homeowners Equipment Breakdown?

Insurance company forms can differ, but many have a $100,000 limit. That’s enough to cover almost any system in American homes.

Does a Deductible Apply to Equipment Breakdown?

Yes. Usually it’s different than your regular homeowners policy deductible. $500 is a common deductible on homeowners Equipment Breakdown Endorsements.

What’s Not Covered by Equipment Breakdown?

Wear & tear and gradual deterioration are never covered. Everything eventually fails. Don’t expect insurance to pay for items past their useful life.

For example, if your 30-year old air conditioning compressor dies. the insurance company will likely deny your claim.

Other exclusions apply to all homeowners policies. Examples include intentional damage; flood; or seepage through a foundation.

Homeowners Equipment Breakdown Coverage vs. Home Warranty

Many home buyers buy a home warranty when they invest in a home. Home warranties help guard against big expenses in the first few years of ownership. They pay the cost of repairing or replacing major appliances or equipment.

Unlike Equipment Breakdown insurance, home warranties usually pay even for wear & tear. That’s why home warranty coverage is much more expensive than equipment breakdown coverage.

Equipment breakdown often costs less than $50 a year. Home warranties can cost $50 or more per month.

Why to Buy Homeowners Equipment Breakdown Coverage – or Not

You might purchase breakdown coverage on your homeowners if:

  • Your home or most of its equipment is newer.
  • The coverage is inexpensive.
  • It’s included in some bundle of other extra coverage that you want or need.

You might NOT purchase homeowners Equipment Breakdown coverage if:

  • You already purchased a home warranty
  • Your home’s equipment is older and you’re worried about breakdown due to wear & tear.

Do you own a home or condo in the Portland, Maine area? Have questions about equipment breakdown? Worried about big expenses from property damage? Contact Noyes Hall & Allen Insurance in South Portland at 207-799-5541. We offer a choice of Maine’s top property insurance companies. We’re independent and committed to you.

Is Skunk Spray Covered by Insurance?

Posted on by Bob O'Brien

A Portland, Maine woman recently had an unwelcome guest. A skunk snuck into her home and sprayed 4 times inside before police could remove it. What a mess! The home and everything in it must be deodorized.

Does Home Insurance Cover Skunk Spray?

Will home insurance cover the cost to remove the smell? It depends on whether you bought “off the shelf” coverage or upgraded. It also depends whether your insurance company uses the latest edition of the coverage form (spoiler alert: in this case, the latest is NOT the best).

Skunk Spray Damage Coverage in Basic Homeowners Policies

The most common home insurance form is the ISO HO 00 03. Many Maine insurance companies use it. It’s tried and tested over decades. Insurance people call it “HO-3”.

Insurance Services Office (ISO) updates the form periodically. Each insurer decides which edition to use. In Maine, some insurers still use the 1991 version. Many use the 2000 edition. A few have adopted the 2011 edition.

Before the 2011 edition, “off the shelf” HO-3 policies covered skunk spray damage to buildings. Damage to contents was not covered by the basic policy.

The 2011 edition excludes “discharge or release of secretions by any animals”. Even building damage is no longer covered for skunk spray in the 2011 form.

Which Homeowners Policy Edition do You Have?

Your insurance policy should list coverage forms. The first two letters are the coverage type – “HO” for homeowners. The next four digits are the form number. Basic homeowners are 00 03. Condo policies are 00 06. Renters policies are 00 04. The final four digits are the month and year of the edition. For example, HO 00 03 05 11 is the 2011 edition of the basic homeowners policy.

Can You Buy Extra Insurance for Skunk Damage?

We recommend “open perils” coverage for contents. That covers skunk spray damage on the pre-2011 forms. Ask your agent if you’re eligible for that.

Unfortunately, we know of no way to add skunk spray coverage to the 2011 edition of the policy. The exclusion in the 2011 form denies coverage for skunk spray to both building or contents. You can’t buy it back. That stinks (sorry, we couldn’t help it).

What if a Skunk Sprayed My Vehicle?

You may have purchased “other than collision” coverage on your auto insurance policy. Some people call this “comprehensive” coverage. Most common auto insurance policies in Maine cover damage by animals. That includes skunk spray. So, if a skunk gets into your car and sprays, you probably have coverage. As long as you purchased “other than collision” coverage.

Action Items:

  • Check your property insurance policy’s coverage form and edition date
  • Ask your agent if you have “open perils” coverage. If not, get a quote to add it if you’re eligible.
  • If you’re on the 2011 homeowners form, ask your agent for a quote with a company that uses one of the older editions.

Do you live in the Portland Maine area? Have questions about home, condo, renters or auto insurance? Contact Noyes Hall & Allen Insurance in South Portland at 207-799-5541. We’re independent and committed to you. We offer a choice of many of Maine’s preferred insurance companies. One of them is likely a good fit for you.

What Happens When a Vehicle is Totaled in Maine?

Posted on by Bob O'Brien

When a crash or disaster seriously damages your vehicle, it’s stressful and confusing. If the damage is bad enough, an insurance company might declare your vehicle a total loss. Fortunately, it doesn’t happen often to most of us. What does it really mean when your vehicle is totaled?

What Does it Mean When a Vehicle is Totaled?

A vehicle is a total loss when the cost to repair it exceeds a percentage of its value. The calculation method and ratio vary state to state. Some states use a flat percentage of the vehicle’s value as a threshold. Other states add the salvage or scrap value of the vehicle. That’s called the formula method. In general, it’s easier to total a vehicle using the formula method. That’s because the salvage value is added to the value of the vehicle before calculating the percentage.

Maine uses the formula method. Maine law considers a vehicle a total loss if the damage plus the scrap value exceeds 75% of the value.

For example:

Vehicle’s pre-loss Value Repair Cost Salvage Value Repair + SalvageTotaled?
$5280$3150$500$3650NO
$5280$3650$750$4400YES

My Car’s Worth More than the Repair Estimate. Why is it Totaled?

When an insurance company totals your car instead of paying the repair cost, they sell the salvage. The scrap value is considered part of the value of your vehicle. If it’s cheaper for the insurance company to pay you the value of your car and recover the salvage, they will. If it’s cheaper for them to repair your vehicle, they will do that.

In Maine, if the cost to repair plus the scrap value exceeds 75% of your vehicle’s value, the insurance company can total it.

Why 75%? Insurance companies know there’s often hidden damage after a serious loss. When the repair shop removes outer damaged parts, more damage is revealed. That increases the repair cost from their original estimate. So, insurance companies use 75% to provide a safety factor. That way, they’re not paying more to fix your vehicle than it’s worth.

Why Nicer Cars Are Easier to Total

High end cars cost more to fix. Their salvage value is also higher. So, the nicer your vehicle, the easier it is to reach the 75% threshold. A newer vehicle with a lot of cosmetic damage (e.g. hail) may have no mechanical issue and still be totaled. That’s because many expensive mechanical parts are still good, increasing the scrap value.

What Happens When My Vehicle is Totaled in Maine?

If your Maine vehicle is totaled, you essentially sell it to the insurance company. They pay you the pre-damage fair market value of the vehicle. You sign the title over to the insurance company. They keep the salvage value after selling it. Usually, it’s sold at auction.

Can You Keep Your Vehicle in Maine After It’s Totaled?

You can buy your unrepaired vehicle back from the insurance company for its salvage value. You still sell the vehicle to the insurance company by signing over the title. They pay you the pre-damage value of your vehicle, minus the salvage value. They sell you a Maine salvaged title for the salvage value.

Can I Drive a Vehicle With a Maine Salvaged Title?

No. Once there’s a salvage title, all of the work on the repair estimate MUST be done before you can drive the vehicle. You and the repair garage must complete and submit Form MVT-103 to Maine Bureau of Motor Vehicles.

When the State of Maine approves your vehicle repairs, it issues a rebuilt title. A rebuilt titled vehicle is worth less than one with a regular title.

Many insurance companies will not offer comprehensive or collision coverage for a vehicle with a rebuilt title. That’s because it can be difficult to assess the fair value of the vehicle.

The Insurance Company Wants to Total My Vehicle. Do I Have to Accept That?

You have the right to get your own repair estimate and choose your own body shop. Can you find one that will repair your vehicle for less than the threshold? Your insurance company might agree and pay the repair cost. Remember: in Maine, the 75% threshold includes the scrap value of your vehicle.

Once an insurance company totals your vehicle, you have a salvage title. You must repair the vehicle to drive it.

What if the damage is mostly cosmetic, and the car drives fine? You have the option to withdraw your claim and avoid a salvage title.

An Example of Withdrawing a Claim

Assume that a hailstorm pounds your vehicle. Dozens of dents on the hood, roof and trunk; a broken windshield. But the vehicle drives fine, and the dents don’t bother you. You could withdraw your insurance claim and pay to repair your windshield “out of pocket”. Although your vehicle may not look great, you might be able to drive it for many more years.

What if you withdraw your claim and don’t repair the body damage? Your insurance company will probably remove comprehensive and collision coverage. That’s because they wouldn’t pay for future damage; they already consider it totaled. Makes sense.

If you switch insurance companies, it’s important to declare the prior damage to them. The new insurance company will likely exclude comprehensive and collision coverage, too.

Questions About Maine Auto Insurance?

Do you live in Southern Maine and have questions about your auto insurance? Contact Noyes Hall & Allen Insurance in South Portland at 207-799-5541. We’re independent and committed to you. We offer a choice of Maine’s preferred auto insurance companies.