Insurance Coverage Required by Law
Maine law requires that you buy liability insurance and uninsured motorists coverage. Effective July 1, 1998, you are also required to buy Medical Payments coverage.
Under Maine auto insurance law, you cannot register your vehicle unless you show proof that you have this minimum amount of insurance. There is also a mandatory $1,000 medical payments coverage that is required.
Keep in mind that these minimum amounts under Maine auto insurance law may be low for your situation and you may want to buy more coverage. You should base your decision on your wish to protect your assets from additional claims above the minimum amounts.
However, remember that as you raise your coverage, your premiums will also increase. The extra cost of higher coverage tends to be relatively low.
What is Liability Insurance?
Most auto liability insurance policies contain three major parts:
- liability insurance for bodily injury;
- liability insurance for property damage; and
- uninsured/under-insured motorists coverage.
Bodily injury liability insurance does not protect you or your car directly. If you are the cause of an accident in which other people are injured, this insurance protects you against their claims for damages such as medical expenses, lost wages, and pain and suffering. This insurance coverage will also pay if the accident was caused by a member of your family living with you or a person using your car with your permission.
The maximum amount your insurance company pays for any one victim injured in an accident and the amount they must pay for multiple victims is determined by the amount of insurance you buy. The amounts are shown on the Declarations Page (usually the cover page) of your policy.
Property damage liability insurance pays for any damage you cause to the property of others, like a crushed fender, broken glass, or a damaged wall or fence. Your insurance will pay for this damage whether you are driving your car or whether it is being driven by another person who has your permission. Again, the minimum limit required by Maine law is $25,000.
Uninsured/Underinsured motorists coverage protects you directly. This coverage pays if you are hurt by a hit-and-run driver or a driver who does not have auto insurance. This coverage actually takes the place of the insurance that the other driver should have purchased but didn’t.
Although liability insurance is required by Maine auto insurance law, not all drivers obey the law. This coverage also provides protection if you are injured by a driver who is underinsured. Underinsured drivers are those who have insurance but who bought insurance limits lower than the amount you purchased. Consequently, their coverage may not be enough to pay for your injuries.
The minimum amount of uninsured motorists coverage under Maine auto insurance law that you must buy is $50,000 per person and $100,000 per accident. Uninsured motorists coverage does not protect the other driver and it does not cover damage to your vehicle.
As of October 1, 2000 (unless you request lower limits in writing to your producer or company) Maine auto insurance law requires that you have uninsured motorist coverage equal the amount of liability that you have on your policy, unless you specifically elect to buy uninsured motor vehicle coverage with lower limits of liability for bodily injury or death.
In accordance with Maine auto insurance law, you must provide a rejection of equal coverage in writing on a form provided by the insurance company before the effective date of the policy.
However, if you decide to request a lower limit in writing, the limit cannot go below the minimum required limit under Main auto insurance law of $50,000 per person and $100,000 per accident.
What Other Insurance Is Required?
Medical payments coverage pays for the medical and funeral expenses for you or others hurt or killed in an accident while riding in or driving your car.
Claims against this coverage include all reasonable hospital, surgical, chiropractor, X-ray, dental, professional nursing, prosthetic, and funeral expenses. It will also cover you or members of your family if you are hit by a car when you are walking or if you are riding in another car.
This coverage will pay for your medical and funeral expenses even if you cause the accident. Usually, only expenses incurred within a specified period of time after the accident are included.
Medical payments coverage is also required by Maine auto insurance law. Effective July 1, 1998, you must have at least $1,000 in medical payments coverage on your policy.
The coverages previously discussed are the basic coverages required by Maine auto insurance law. However, when you buy auto insurance you will have to decide if there are other insurance coverages that you would like to add to your policy.
Another way to have higher limits of liability inexpensively is to purchase a personal umbrella policy. An umbrella policy provides broad liability protection over and above your auto policy’s liability limits. It will also cover some exposure to losses that are not covered by your auto or homeowner’s policies.
What About Coverage for Damage to My Vehicle?
In addition to the basic liability coverages described previously, the other most common coverages are collision and comprehensive.
Collision coverage pays for physical damage to your car when your car collides with an object, like a tree or another car.
Although not required under Maine auto insurance law, collision insurance may be required by your bank or credit union if you have a loan. Also, if you are leasing a car, the person who leases the car to you may also require it.
Comprehensive coverage pays for damage to your car from almost all other causes (other than collision) including fire, severe weather, vandalism, floods, and theft. Comprehensive coverage also covers broken glass, such as windshield damage. However, remember that comprehensive is not required by Maine auto insurance law.
If you buy collision or comprehensive coverage, you can save money by agreeing to the highest deductible you can afford to pay in case of an accident. A deductible is the amount of money you agree to pay as part of a claim before the insurer is obligated to pay the rest of the claim.
For example, if you carry collision coverage with a $200 deductible and you have a $500 loss, you must pay $200 and the insurance company would have to pay the remaining $300.
Deductibles reduce your premiums because you agree to pay a set amount of your claim that your insurer would otherwise have to pay. Insurance companies offer deductibles because they reduce the number of small claims which are expensive for them to handle.
Although not required by Maine auto insurance law, if you buy a new car with a loan, the financial institution that loaned you the money may require you to buy comprehensive and collision coverage. This is because they want to make sure your car is worth something if they have to repossess it.
If you are pulled over without a license, speak with a Baltimore suspended license lawyer today.