Homeowners Insurance in Maine

Maine homeowners face unique property risks from harsh winters, coastal storms, and seasonal weather patterns. Understanding how standard homeowners policies address these perils is essential for both exam success and professional practice.

Standard Homeowners Policies

Maine uses the standard ISO homeowners policy forms with some state-specific modifications:

Common Policy Forms

Exam Tip: HO-3 is the most common policy in Maine, providing "open perils" (all risks) coverage on the dwelling and "named perils" coverage on personal property.

Coverage A: Dwelling Coverage

What's Covered - Open Perils (HO-3)

Under HO-3 policies, dwelling coverage includes damage from all perils except those specifically excluded:

Covered Perils Include:

• Fire and lightning
• Windstorm and hail
• Snow and ice damage (roof collapse, ice dams)
• Freezing (frozen pipes)
• Falling objects
• Weight of ice, snow, or sleet
• Explosion
• Theft and vandalism

Important Exclusions

Standard homeowners policies exclude:

Maine-Specific Note: While flood is excluded, many Maine homeowners need flood insurance due to coastal storm surge, river flooding, and spring snowmelt runoff.

Maine Winter Weather Coverage

Snow and Ice Damage

Maine homeowners policies typically cover winter weather damage:

Covered Winter Perils:

1. Weight of Ice, Snow, or Sleet

   • Roof collapse from snow accumulation
   • Structural damage from ice buildup
   • Coverage under Coverage A (dwelling)
   • Applies to detached structures (Coverage B)

2. Ice Dam Damage

   • Interior water damage from ice dams
   • Covered under standard HO-3 policy
   • Includes damage to walls, ceilings, floors
   • Personal property damage (if covered under Coverage C)

3. Frozen Pipe Bursts

   • Pipes freeze and burst causing water damage
   • Covered if homeowner maintained heat
   • Excludes damage from neglect (no heat in winter)
   • Must show reasonable care taken

Example Scenario:

A Portland, Maine homeowner experiences a roof collapse from heavy snow accumulation in January. The dwelling sustained $25,000 in damage.

• Coverage: Weight of snow is a covered peril under HO-3
• Applies To: Coverage A (dwelling)
• Deductible: Standard deductible applies (typically $500-$2,500)
• Settlement: Replacement cost (if replacement cost coverage purchased)

Winter Weather Exclusions

Not Covered:

• Damage from failure to maintain adequate heat
• Neglect (failing to protect property after initial damage)
• Normal wear and tear (aging roof, poor maintenance)
• Ice accumulation on gutters (preventable maintenance issue)

Exam Tip: Maine courts generally hold homeowners to a standard of "reasonable care" during winter months, including maintaining adequate heat and removing excessive snow when practical.

Coastal Property Insurance

Hurricane and Coastal Storm Coverage

Maine coastal properties face unique wind and water damage risks:

Wind Coverage:

• Standard policies cover wind damage
• Coastal properties may have percentage deductibles for wind/hail (2%-5% of Coverage A)
• Hurricane deductibles apply during hurricane warnings

Maine Hurricane Deductible Rule:

Under Maine regulation:

• Trigger: Hurricane deductible applies when property is under hurricane warning from National Weather Service
• Duration: Begins with warning, ends 24 hours after last warning expires
• Amount: Higher than standard deductible (typically 2%-5% of Coverage A)
• Disclosure: Insurers must disclose hurricane deductible at policy issuance

Example:

Coverage A: $300,000 Standard Deductible: $1,000 Hurricane Deductible: 2%

• Regular windstorm damage: $1,000 deductible
• Damage during hurricane warning: $6,000 deductible (2% × $300,000)

Coastal Wind Restrictions

Properties in coastal areas may face:

Underwriting Considerations:

• Property age and construction quality
• Distance from coast
• Storm history in area
• Hurricane protection features (shutters, reinforced roofing)

Storm Surge and Flooding

Critical Distinction:

• Wind damage: Covered under homeowners policy
• Water damage from storm surge/flooding: NOT covered (requires flood insurance)

This distinction is crucial for coastal Maine properties exposed to nor'easters and hurricanes.

Flood Insurance in Maine

Why Flood Insurance Matters

Maine faces flood risks from:

• Coastal storm surge (hurricanes, nor'easters)
• River flooding (Kennebec, Penobscot, Androscoggin rivers)
• Spring snowmelt and ice jams
• Flash flooding in mountainous areas
• Tidal flooding in coastal communities

National Flood Insurance Program (NFIP)

Coverage Available:

• Up to $250,000 dwelling coverage
• Up to $100,000 contents coverage
• Separate deductibles for dwelling and contents
• 30-day waiting period (exceptions for purchases, renewals)

Eligibility:

• Property must be in NFIP participating community
• Most Maine coastal towns participate
• Flood maps determine flood zones and rates

NFIP Flood Zones

Maine Focus: Many coastal properties are in Zone VE (high velocity coastal zones), requiring flood insurance and facing higher premiums.

Private Flood Insurance

Maine producers should know:

• Private flood insurance is available as alternative to NFIP
• May offer higher coverage limits than NFIP
• Can be less expensive in some cases
• Must meet lender requirements if replacing NFIP
• Growing market in Maine coastal areas

Vacation and Seasonal Homes

Special Considerations

Maine has a significant vacation/seasonal home market:

Insurance Challenges:

• Unoccupied for extended periods
• Increased risk of undetected damage
• Frozen pipes from inadequate heat
• Higher theft risk when vacant
• Difficulty with emergency response in rural areas

Vacancy and Unoccupancy

Key Definitions:

• Vacant: Property is empty AND unfurnished
• Unoccupied: Property is furnished but not currently occupied

Standard Policy Provisions:

• Most HO-3 policies suspend certain coverages after 60 consecutive days of vacancy
• Suspended coverages during vacancy (typically):
  • Vandalism and malicious mischief
  • Glass breakage
  • Theft
  • Water damage from plumbing/heating systems

Seasonal Home Solutions:

1. Seasonal Dwelling Policy (DP-3 variant)

   • Designed for vacation homes
   • Less restrictive vacancy provisions
   • Higher premiums

2. Endorsements

   • Vacancy permit endorsement
   • Extended vacancy coverage
   • Permits longer unoccupancy periods

3. Risk Management

   • Winterization requirements
   • Regular inspections
   • Local emergency contacts
   • Adequate heat maintenance

Exam Tip: Standard HO-3 policies typically suspend certain coverages after 60 days of vacancy. Seasonal homeowners need special coverage or endorsements.

Coverage C: Personal Property

Named Perils Coverage

Under HO-3, personal property is covered for these named perils:

1. Fire or lightning
2. Windstorm or hail
3. Explosion
4. Riot or civil commotion
5. Aircraft
6. Vehicles
7. Smoke
8. Vandalism or malicious mischief
9. Theft
10. Falling objects
11. Weight of ice, snow, or sleet
12. Accidental discharge of water or steam
13. Sudden and accidental tearing apart of heating/AC systems
14. Freezing of plumbing, heating, AC systems
15. Sudden and accidental damage from artificially generated electrical current
16. Volcanic eruption

Special Limits of Liability

Standard policies impose dollar limits on certain property types:

Solution: Schedule high-value items with personal articles floater or inland marine coverage.

Additional Coverages

Coverage D: Loss of Use

Pays additional living expenses if home is uninhabitable:

Covered Expenses:

• Hotel/rental housing costs
• Restaurant meals (above normal food costs)
• Storage fees
• Pet boarding

Maine Winter Scenario:

Ice dam causes extensive water damage, requiring 2 months of repairs. Coverage D pays for:

• Temporary apartment rental
• Increased meal costs
• Storage of furniture during repairs

Coverage E & F: Liability Coverage

Coverage E: Personal Liability

• Typical limit: $100,000-$500,000
• Covers bodily injury and property damage liability
• Legal defense costs (in addition to limit)

Coverage F: Medical Payments to Others

• Typical limit: $1,000-$5,000 per person
• No-fault coverage for guest injuries
• Covers medical expenses regardless of liability

Maine Liability Scenarios:

• Slip and fall on icy driveway
• Tree falls on neighbor's property
• Guest injured on property
• Dog bite liability