Conditional renewal occurs when your insurance company makes changes to your policy that you did not request. These changes can range from minor adjustments to significant alterations. It’s essential to understand what these changes mean for you..
When Do Insurers Use Conditional Renewal?
Insurance companies often change underwriting requirements. They often “grandfather” in-force policies from these changes. But sometimes conditions change dramatically. Then the insurance company decides to make wholesale changes, even to in-force policies. Or, the insurance company may take a specific action on your policy.
Common Conditional Renewal Types
These are the most common changes in a conditional renewal:
Deductible changes – This could mean an increased deductible or the introduction of a new type, such as a separate wind or hurricane deductible.
Liability Limits – Your liability insurance protection might be reduced, for example, from $500,000 to $100,000.
Coverage exclusions or reductions – Certain coverages, like towing or roadside assistance, might be removed or reduced.
Large rate increases – Some states require notification of significant price increases, though this is not the case in Maine.
Why Am I Getting a Conditional Renewal?
Your insurer might be implementing an across-the-board change, such as a new minimum deductible or a wind deductible for any property in a certain location.
Or the underwriter could be taking specific action on your policy. This is usually in response to claims or some condition that they’ve identified. In this kind of conditional renewal the notice will list the reasons.
Is the Insurance Company Canceling My Policy?
No, a conditional renewal is NOT a non-renewal. The insurance company is offering to renew your policy, however with different terms than before. On the other hand, if the insurance company mails you a Notice of Nonrenewal, they are terminating your contract.
Do I Have Options?
You’re not required to accept the conditional renewal, but it might still be the best deal for you. Conditional renewal is often a re-calibration to the market. In other words, your insurance company is doing what most new insurers would do.
However, you can check with your Noyes Hall & Allen agent to see what they think. We offer a choice of several insurance companies. That gives us good perspective on the market so that we can provide personal advice for your specific situation. We like to say we’re independent and committed to you.
Maine insurance rates follow national and local trends and claim experience. Home and auto rates continue to rise as insurers and customers struggle with rising costs. Portland Maine area insurance buyers saw more than a 15% price increase in 2023. Industry experts expect this to continue in 2024. Still, Maine insurance rates remain among the lowest in the US.
Maine Insurance Rates – December 2023 – Auto
Portland Maine area auto insurance rates jumped 14.4% on average in 2023. The average annual auto insurance policy in Cumberland County now costs $1475 per year.
According to a report by Insurify, personal auto prices were up 17% countrywide in the first half of 2023. The Bureau of Labor Statistics reported that auto insurance prices increased 20.3% in 2023. Maine rates increased even more: 28% statewide, according to Insurify. That was the 6th highest rate in the US.
Several factors put strong upward pressure on auto insurance rates everywhere in the US:
Used auto prices are at an all-time high.
New vehicles have much more technology, which makes parts more expensive to replace.
Auto body shops are backlogged, increasing auto rental costs
Auto parts and labor remain scarce, increasing prices
Medical care inflation is high.
Will auto insurance rates level off in 2024? We don’t see any signs that they will. Neither does the financial advice site Motley Fool.
The good news is that Maine auto insurance rates are the lowest in the US according to the Value Penguin “State of Auto Insurance 2024” report. They report that the average Mainer pays $92 per month for car insurance, 44% less than the national average.
Maine Insurance Rates – December 2023 – Homeowners
Maine home insurance rate increases continue to outpace even large auto insurance increases. The average home insurance premium was 17.7% higher than a year ago. The end is not in sight yet, as US home insurers report record losses from weather events and historically high rebuilding costs.
Many of the same insurance inflationary factors described above affect home insurance. But reinsurance costs remain one of the biggest drivers of property insurance rates. Reinsurance is insurance for insurance companies. It protects them against catastrophic losses from natural disasters like wildfires, blizzards, ice storms, hurricanes and tornadoes. Many insurance companies continue to see their reinsurance costs jump 30-50% this year. Insurance companies pass on that cost to their customers.
Although this isn’t great news for Mainers, we’re better off than many areas of the country. Extreme weather has caused wildfires in the west and north, tornadoes and heat in the south and torrential rains elsewhere. Insurance companies have responded by canceling policies in Florida, Louisiana and California, and reducing their new policy offerings elsewhere.
For more than 80 years, we’ve helped southern Mainers navigate the insurance market. While we don’t have any control over prices, we offer a choice of several insurance companies. That means we can help you find the best insurance value in any market.
Maine insurance rates are affected by national and local trends. Home and auto rates continue to jump as insurers and customers struggle with rising claim costs and construction values. Portland Maine area insurance buyers saw almost a 15% price increase in the 2nd quarter of 2023. Still, Maine insurance rates remain among the lowest in the US.
Maine Insurance Rates – April to June 2023 – Auto
In the 2nd quarter of 2023, Portland Maine area auto insurance rates jumped 11.6% on average at renewal, up from 2% a year ago. The average annual auto insurance policy in Cumberland County costs $1374 per year.
According to a report by Insurify, personal auto prices were up 17% countrywide in the first half of 2023. Insurify says that Maine rates increased even more: 28% statewide. That was the 6th highest rate in the US.
Insurers continued to report higher than expected losses as body shops and mechanical repair shops passed along higher costs. Used auto prices spiked during COVID and settled above pre-pandemic levels. Finally, auto rental times remain very long as body shops require much more time to schedule repairs. All of these factors, along with medical cost increases, put strong upward pressure on auto insurance rates in 2Q 2023.
Maine Insurance Rates – Home – April to June 2023
Maine home insurance rate increases continue to outpace even large auto insurance increases. The average home insurance premium was 13.3% higher than a year ago. That’s up from 4% a year ago. The end is not in sight yet.
Many of the same inflationary pressures pushed home prices higher. Building materials and labor costs have dropped from post-COVID peaks, but remain historically high. It’s been difficult and expensive to find contractors. That delays repairs and increases claim costs.
But reinsurance costs remain one of the biggest drivers of property insurance rates. Reinsurance is insurance for insurance companies. It protects them against catastrophic losses from natural disasters like wildfires, blizzards, ice storms, hurricanes and tornadoes. Many insurance companies continue to see their reinsurance costs jump 30-50% this year. Insurance companies must pass on that cost to their customers.
Although this isn’t great news for Mainers, we’re better off than many areas of the country. Extreme weather has caused wildfires in the west and north, tornadoes and heat in the south and torrential rains elsewhere. Insurance companies have responded by canceling policies in Florida, Louisiana and California, and reducing their new policy offerings elsewhere.
Compare Your Options with an Independent Agent
Most financial advisors recommend comparing to get the best insurance value. If you live in southern Maine, you can get up to 5 insurance quotes in 10 minutes from our website. Or contact a Noyes Hall & Allen agent in South Portland at 207-799-5541 for a free no-obligation custom review. We offer a choice of several insurance companies. That means we can help you find the best insurance value.
Maine insurance rates are following national trends. Home and auto rates are up as insurers try to catch up with rising claim costs and construction values. Portland Maine area insurance buyers saw almost a 10% price increase in the 1st quarter of 2023. Even so, Maine insurance rates remain among the lowest in the US.
Maine Insurance Rates – Auto – January to March 2023
Between January and March 2023, Portland Maine area auto insurance rates jumped 6.8% on average at renewal, up from 3.7% last September. The average annual auto insurance policy in Cumberland County costs $1341 per year.
Insurers reported higher than expected losses as people drove more after COVID reductions. Body shops and mechanical repair shops charged higher prices due to supply chain and labor shortages. Used auto prices spiked during COVID and settled above pre-pandemic levels. Finally, auto rentals are much more expensive, and needed longer due to body shop delays. All of these factors, along with medical cost increases, put strong upward pressure on auto insurance rates in 1Q 2023.
Maine Insurance Rates – Home – January to March 2023
Maine home insurance rates increased even faster than auto insurance. The average home insurance premium was 10.9% higher than a year ago. That’s up from 9.6% in September. And we haven’t seen the end yet.
Many of the same inflationary pressures pushed home prices higher. Building materials and labor costs spiked dramatically during COVID and haven’t settled completely back. It’s been difficult and expensive to find contractors. That delays repairs and increases claim costs.
But reinsurance costs are probably the biggest driver of property insurance rates. Reinsurance is insurance for insurance companies. It protects them against catastrophic losses from natural disasters like wildfires, blizzards, ice storms, hurricanes and tornadoes. Many insurance companies saw their reinsurance rates jump 30-50% this year. Insurance companies must pass on the cost of reinsurance to their customers.
Compare to Find the Best Value
Most financial advisors recommend comparing to get the best insurance value. If you live in southern Maine, you can get up to 5 insurance quotes in 10 minutes from our website. Or contact a Noyes Hall & Allen agent in South Portland at 207-799-5541 for a free no-obligation custom review. We offer a choice of several insurance companies. That means we can help you find the best insurance value.
Should I buy rental car insurance? As a Maine insurance agency, that’s one of our most common auto insurance questions. The answer is a bit complicated. It depends on your risk tolerance, too.
Before we start, 2 important warnings:
This advice applies to Maine insurance policies only. Auto policies vary by state. Check with your insurance company about your own policy.
Auto rental contracts differ. Read yours carefully to find out what you’re responsible for.
OK. Here are some things to consider when deciding whether or not to buy rental car insurance.
What Kind of Vehicle Are You Renting, and Why?
If you’re renting anything but a car, passenger van, SUV or pickup, buy the insurance from the rental car agency. Your Maine personal auto policy will not cover you properly. Likewise, if you’re renting a vehicle for business use, or in a business name, buy insurance from the rental car company.
Where Are You Renting?
U.S. auto policies only cover you in the U.S., its possessions and territories, and Canada. If you’re renting anywhere else, buy rental car insurance from the rental company.
What is Your Risk?
You face four types of risk when you rent a vehicle: liability, collision, injury and lost income for the rental company. Let’s look at the types of coverage that the car rental companies offer.
Rental Car Insurance – Liability
If you are at fault in a crash, you’re liable for any damage or injury you cause. Rental car companies sell Liability Damage Waiver insurance. That means they take responsibility for your action, provided you were operating with in the terms of your rental contract.
Maine auto insurance policies extend your liability protection to rental cars. Therefore, it’s not usually necessary to purchase Liability Damage Waiver from the rental car agency. You usually already have coverage under your own insurance. An exception might be if you have purchased very low liability limits.
Rental Car Insurance – Collision
If you crash a rental car, you’re responsible for the cost to fix it. If it’s stolen while you rent it. You’re responsible to replace it. Car rental companies sell “Collision Damage Waivers” (CDW) to remove that risk. This waiver is not insurance. It’s simply a promise from the rental car agency that they won’t make pay to repair or replace it. CDW is also expensive: often $10 to $30 per day.
Some states also allow the rental car company to claim diminished value. That’s the difference between the car’s value before the crash and after it’s fixed. Maine auto insurance policies are not required to cover diminished value.This is a gap, and a risk that you should think about before declining CDW.
Injury
Rental car company insurance usually doesn’t cover injuries to people in your vehicle. Your Maine auto insurance policy provides medical payments coverage, which is likely a small amount. Regular medical insurance (if any) takes over from there. Otherwise, your medical bills for crash injuries must be paid out of pocket.
Lost Income to Rental Car Company
If you damage a rental car, the rental company has to pull it from the fleet until it’s repaired. That means they lose income. And that’s your responsibility.
Rental car companies sell Loss Damage Waivers (LDW). Similar to the CDW, these are not insurance. They transfer the risk of the lost income from you to the rental company. These cost about as much as Collision Damage Waivers: up to $3,000 per year if you annualize it!
Maine Law requires your auto insurer to cover verifiable loss of use for the rental company up to 30 days. That’s fine as long as the rental company doesn’t claim more than 30 days lost income. With supply chain issues and labor shortages, repairs can often take more than 30 days. You could still be responsible for loss of income beyond 30 days. This is a gap, and one you should consider before declining to purchase LDW.
Rental Car Insurance Tips
Check the Vehicle
Protect yourself by checking the car carefully for damage – with a rental company employee present – before you leave the lot and when you return it. Request that all prior damages be noted in writing. We’ve heard about car renters being charged for damage weeks after turning in vehicles. If you didn’t have an attendant check the vehicle when you returned it, there’s no way to prove your innocence.
Read the Contract
Rental contracts differ. Be sure you understand:
Your responsibilities
Who can drive the vehicle
Any restrictions or requirements (alcohol or drug use, types of roads driven, etc.)
Rental Car Insurance: Budget vs. Risk
Buying the waivers from the car rental company is the safest way to reduce your risk. But it’s expensive. Weigh the cost of those waivers against the additional risk you assume by not buying them.
Insurance rates will increase in 2023 for individuals and businesses. Insurance people increasingly expect what they call a “hard market”. Underwriting gets tighter. Insurance rates rise. Appetite for risk shrinks. It’s part of the natural insurance cycle. Here’s why we’re seeing it now.
Insurance Rates Rise in Uncertainty
Insurance companies use history and future expectations to set rates. When they feel confident in their claim predictions, rates are more stable. When confidence is lower, their risk of getting it wrong is higher. That means prudent insurance companies have to charge more “just in case”.
These are uncertain and risky times. Weather and natural disasters are more extreme and difficult to forecast. Moreover, economic signals are mixed. Supply channels are challenged. Even public health is in flux. All that uncertainty prompts insurers to set rates cautiously. They need make sure they’ll be able to pay claims.
Inflation Affects Insurance
We all feel the effects of inflation. Prices are higher for everything from groceries and gas to lumber and plumbers. Insurance companies feel it too. Medical expenses, auto repairs rental, used cars, building materials and costs all increased dramatically during and after COVID.
Some of those costs have settled, but none are where they were before. Meanwhile, insurance companies had to pay 2020 claims with premiums collected using 2019 rates – before anyone knew what was coming.
Insurance Rates Rise After Disasters
Wildfires, tropical storms, temperature extremes, droughts and floods and other disasters are more frequent. Insurance companies have paid billions in property claims. It makes no difference whether they believe these are trends or blips. Insurance companies need to prepare to collect enough premium to pay losses.
The Reinsurance Effect
You buy insurance to protect your family or business from disaster. Insurance companies do the same. They buy reinsurance each year to protect them from going bankrupt due to a catastrophe. Of course, reinsurers set their rates based on losses and projections, too. Now, the property reinsurance rates that insurance companies pay are rising by double-digits. Insurance companies pass that cost on to consumers as part of their rates.
In Maine, we’re fortunate not to have many of these disasters. But we still share in the losses of other regions through reinsurance rates. And, we have harsh weather, too – remember the Ice Storm?
Insurance Rates Vary – Choice is Important
Although insurance costs are higher across the board, each insurer sets their own rates. That’s why it’s important to compare coverage and price to find the best value. As an independent insurance agency in South Portland, Noyes Hall & Allen Insurance offers a choice of several preferred insurance companies. Contact a Noyes Hall & Allen agent. We can help you compare and decide which is the best fit for you. We’re independent and committed to you.
Does car insurance include roadside assistance in Maine? It’s a common question.
Off the shelf auto insurance policies do not include roadside assistance. But many insurance companies offer it as an option. Others offer towing coverage. Both are less expensive that auto club options.
Are Roadside Assistance and Towing Insurance the Same?
Insurance companies have offered towing coverage for years. Roadside assistance is newer. They’re not exactly the same thing.
Roadside assistance and towing cover many of the same things. Examples are: flat tire repair; jump starting; fuel delivery; and towing, of course. The difference is that towing coverage reimbursesyou after the service call. You have to arrange your own service provide. Coverage is limited to a flat dollar amount, often $75.
Roadside assistance is a service. You don’t usually pay at the scene. If you need assistance, you call a special number and provide your policy info. Some insurers have their own app that you can use to summon help. They dispatch a truck to come and help you. Some roadside plans have a dollar limit per disablement. Most use a towing distance limit – often 25 miles.
How Much Does Roadside Assistance Cost on an Auto Insurance Policy?
Each insurance company sets its own rates. In Maine, expect to pay between $10 and $20 per vehicle per year for roadside assistance. Towing coverage usually costs less than $10 per vehicle for a $75 limit.
Do You Need Roadside Assistance or Towing Coverage if You Have AAA or Onstar?
Most people choose not to have both. They either buy roadside assistance on their auto insurance, or another road service.
Some clients choose to buy towing insurance even though they have another service. For example, some subscription plans charge extra to tow more than 25 miles. If that happens, they pay the excess and submit the bill to their insurance under towing coverage.
Answers to Maine Auto Insurance Questions
Live in southern Maine? Have questions about roadside assistance or auto insurance? Call a Noyes Hall & Allen agent in South Portland at 207-799-5541. We offer a choice of many of Maine’s most popular insurance companies. Many of them offer optional roadside assistance coverage. We’ll help you find a solution that fits your needs and budget. We’re independent and committed to you.
Replacing a car with a new one is an easy insurance transaction. Here’s the info your agent needs to do it:
3 Things Your Agent Needs:
VIN – The Vehicle ID Number for the new vehicle. It’s 17 digits long. That’s easy to transpose. And lots of letters and numbers sound alike, so they’re easy to get wrong. A photo of the VIN simplifies the process and reduces mistakes. Text it to your agent, or email it to them.
Finance Info – Did you buy the vehicle outright? Congratulations! Your agent doesn’t need anything. But if you lease it or take out a loan, they do. The name and address of the finance company will be on your title application. Email or text a photo to your agent. Or, you can call with the info.
Aftermarket Safety or Security Options – The VIN contains details about what’s on your vehicle when it comes off the assembly line. If you purchased add-ons at the dealership, let your agent know. That might include subscription items like OnStar. Or an after-market alarm system.
Do you live in Southern Maine and have questions about auto insurance? Contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We’re independent and committed to you.
During the COVID-19 pandemic, reduced driving and insurance costs have been a hot topic. Many Mainers are driving less. Why haven’t their car insurance rates dropped? It’s more complicated than you might think. But there are ways to keep your car insurance costs in check.
Why Maine Insurance Rates Haven’t Dropped
Insurance is Slow and Steady
We count on insurance companies to be dependable and stable. We need to know they’ll be able to pay claims in the future. So it’s no surprise that insurance companies aren’t built to react to fast trends. Especially those that may not last.
We want stable insurance prices. The whole purpose of insurance is to avoid a large loss by paying a small cost (premium). Some years, disasters cause insurance companies lose a lot of money. Other times, claims are low. Insurers bank our premiums in those times to pay for the bad ones.
Insurers Have No Experience with COVID
In insurance, data rules. Insurance companies charge premiums based on expected claims. They hire smart math nerds who use decades of data to find the proper rates. Consumers want the lowest possible price. Regulators and stakeholders want rates high enough to make a profit pay future claims.
Historical data didn’t help much during COVID. Americans drove less as people telecommuted and stayed close to home. Nothing was normal.
But overall mileage doesn’t tell the whole story. Essential workers continued to commute as usual (thank you, essential workers!). Law enforcement and highway construction crews noticed increased speeds due to less traffic. That led to more serious crashes and injuries.
COVID Auto Insurance Rebates in Maine
Remember how quiet the roads were in the early days of the pandemic? It was a very uncertain time for the economy. Many people were out of work, and small businesses feared that they’d have to close.
In response, most American auto insurance companies refunded some premium to policyholders in 2020. This was an unprecedented response by insurance companies. By law, rebating of premiums is illegal. But state insurance departments approved exceptions.
But it wasn’t easy. Insurance companies’ billing systems weren’t programmed to rebate money to customers. It was difficult for many of them to calculate and distribute the refunds.
Although the insurance industry returned $10 billion to US consumers, individual refunds were quite small. The public hardly noticed them. Between the underwhelming public response and the cost of the workarounds, insurers didn’t think the rebates were that valuable. We don’t expect rebates again anytime soon.
Reduce Your Auto Insurance Costs When Driving Less
OK, so car insurance companies aren’t slashing rates in response to COVID. And they’re probably not going to refund premium this year. You still have control over your own policy. Here are some adjustments you can make.
Be Sure You’re Properly Rated
Does your policy reflect your actual driving? If you’re working from home, retired or unemployed, maybe not. Check the drivers listed on your policy. Are any of them no longer at home? Do they now have their own insurance?
Check Your Collision Coverage
Do you have an older car that isn’t worth much? Is it rarely driven? Do you have a vehicle that’s completely off the road? Consider removing collision coverage, at least during COVID. Just remember to add it back if the situation changes.
Prove You’re Driving Less
Even “slow and steady” insurance is changing with the times. Several now offer “usage based insurance”. Commonly advertised brands include Progressive Snapshot, Travelers Intellidrive and Drivewise from Allstate.
With usage-based insurance, you allow the insurance company to customize your rate in exchange for an up-front discount. You’ll need a smartphone and the insurance company’s app. Your final price varies depending on how, how much and when you drive. It can be lower or higher than the initial discount.
Safeco Insurance offers a twist: a “low mileage discount” that doesn’t use a real-time monitor. You simply verify your previous year’s mileage to continue to earn their discount. Safeco also has a usage-based mobile app option.
If those cost-saving measures don’t work for you, you can always compare rates with other insurance companies. Live in Greater Portland Maine? You can get up to 5 Maine auto insurance quotes in 10 minutes on our website. Or call a Noyes Hall & Allen agent in South Portland for quotes at 207-799-5541.
We offer the choice of more than a dozen insurers, so we can search the market for the best value. We’re independent and committed to you.
Some car dealers offer Maine car insurance at the time of purchase. This is good for dealers because it increases their closing rate and their profits.
Is it good for you? Maybe not.
If you already have insurance, making a snap decision to change when buying a new car at a dealership can be a bad choice. Here’s why.
What’s the Rush?
The salesperson may create a sense of urgency about insurance. However, there’s no rush. If you have an insurance policy with collision coverage on at least one vehicle, your policy probably automatically covers the new one until you can contact your insurance company or agent. Dealers know this; it’s been that way for decades.
Why Add Pressure?
Car buying is already a stress. Why add more? Most of us don’t make our best decisions under pressure. Moreover, you’re making a big financial commitment and choosing between expensive options on the fly. Don’t let the salesperson force you to make unnecessary snap decisions. That includes insurance.
A “Good Deal” May Not Be
First, many new cars have high-end safety features that help reduce insurance costs. Therefore, some don’t cost any more to insure than the ones they replace. So, if you get a quote at the dealer, and were pleased to see it wasn’t as much as you expected, it may still be more than your current insurance company would charge.
You Can Mess Up Your Other Insurance
Your current policy might have benefits you’ll lose. For instance, a home/auto bundle discount. Or a multi-vehicle discount. Or accident forgiveness, or some other perk. You could lose those if you make a snap decision to insure your new vehicle at the dealer. In conclusion, you might pay more – not less.
You Can End Up With Worse Insurance
First of all, most people don’t know what insurance they have. For example, the liability limits and deductibles on their policy. If they make snap insurance decisions at a dealership, they can end up with inadequate coverage.
In conclusion, if the insurance quote from your dealer is really a better value, that won’t change in a few days. Take your time. Make your insurance decisions on your schedule – not the salesperson’s. Above all, whether you switch insurance or not, you’ll have peace of mind that you made the right choice after a thoughtful decision.
