Car Insurance Requirements in Maine
Maine’s mandatory car insurance laws requires every driver to insure their vehicle. Whenever a car or truck is registered in Maine, the owner must provide proof that the vehicle is insured. Auto insurance is comprised of several types of coverage:
- Liability insurance for personal injury
- Liability insurance for property damage
- Collision or comprehensive insurance
- Medical payments (med pay) coverage
- Uninsured/underinsured motorists (UM) coverage.
To satisfy the mandatory insurance law in Maine, every insurance policy must provide a minimum of $50,000.00 in personal injury liability insurance for an injury to any one person, $100,000.00 in personal injury liability for injuries sustained by multiple people in a single accident, and $25,000.00 in liability insurance for property damage. These coverages are oftentimes shown as 50/100/25 on your insurance policy declarations page. Some policies combine these coverages. A combined single limit insurance policy of $125,000.00 is acceptable under Maine car insurance laws. A minimum of $2,000.00 for medical payment coverage also is required. Uninsured/underinsured motorist coverage is required in an amount equal to the liability insurance coverage for personal injury.
Liability Insurance- Personal Injury
Liability insurance for personal injury protects you when a claim is made by a person who has been injured in a car accident for which you are at fault. It also provides coverage for claims against a member of your family who was driving your car and lives with you as well as claims against a person who was using your car with your permission.
Liability Insurance- Property Damage
Liability insurance for property damage pays for damage caused by you to another person’s vehicle or other property. This coverage also protects family members who live with you and others who were driving your car with your permission.
Collision insurance pays for damage to your vehicle as a result of an accident. Maine car insurance laws do not require Maine citizens to buy collision coverage. People often waive collision coverage for older vehicles, deciding that the low value of the vehicle does not justify the cost of the coverage. Collision insurance will have a deductible that you must pay toward the repair of your vehicle.
Generally, once the cost of repair reaches a certain percentage of the value of the car, the insurance company will declare the car a total loss. When a vehicle is “totaled”, the car insurance company will pay the actual cash value of the vehicle plus sales tax instead of the cost to repair.
Because collision damage claims trigger your payment of your deductible, such claims generally speaking are made only if there is a dispute over who is at fault in the accident. If the other driver’s insurance company accepts responsibility for the accident, the claim is made under the other driver’s insurance coverage for property damage. One exception is the rare situation where your insurance company’s valuation of a totaled vehicle exceeds the other company’s valuation by an amount greater than the deductible under your collision coverage.
Medical Payments Coverage
Medical payments coverage pays for the medical and funeral expenses incurred by you and any other person injured or killed in an accident while riding or driving in your car. If you were injured while occupying another vehicle, you can add or “stack” the medical payments coverages of the policy insuring the vehicle in which you were hurt and your own policy. Medical payments coverage is a type of no-fault insurance. It will pay medical bills even if you were responsible for the accident. As stated earlier, every car insurance policy issued in Maine must have at least $2,000.00 in medical payments coverage.
If you also have other insurance available for payment of medical bills such as health insurance, Medicare, or MaineCare (Medicaid), Maine car insurance laws require that the insurance company pays first until it has exhausted its medical payments coverage policy limits.
Be aware that if you receive a settlement or are paid after a trial for injuries from a car accident, you may need to repay the insurance company or governmental agency that paid your medical bills initially.
Uninsured motorist coverage provides protection to you, your family, and passengers in your car if injured due to the fault of:
- A hit and run driver;
- An unidentified driver who causes you to swerve off the road even if there is no contact between the vehicles;
- A driver who has no insurance (an uninsured driver); or
- A driver who has personal injury liability policy limits that are lower than your uninsured motorist policy limits (an underinsured driver).
You need not be in a vehicle for uninsured motorist coverage to apply. It also protects you while walking or biking if you are hit by a vehicle. Like medical payments coverage, uninsured motorist policy limits of your own auto policy, the policy insuring the vehicle occupied by you at the time of the accident, and the policies of relatives living in your household may be added together or “stacked.”
Under Maine car insurance laws, your uninsured motorist policy limits must equal your liability policy limits for personal injury unless you specifically elect a lower limit in writing. We recommend against electing uninsured motorist coverage that is lower than your liability policy limits. Uninsured motorist insurance is relatively inexpensive. If you limit the coverage, you could place yourself and your family at risk of insufficient insurance in an accident caused by another driver.
If you may be entitled to uninsured motorist benefits, be careful about settling with the driver who caused your injuries. Settling with the driver without first obtaining the consent of the insurance company providing uninsured motorist coverage can in some circumstances destroy your right to uninsured motorist benefits.