Understanding Maine’s insurance system, including fault vs. no fault insurance
This article provides a comprehensive look at Maine's automobile insurance regulations, detailing minimum coverage requirements, penalties for uninsured driving, and legal recourse for those involved in accidents with uninsured drivers.
The Insurance Information Institute reports that nearly five percent of Maine’s one million drivers lack insurance. This translates to approximately 50,000 Maine drivers without the means to handle the cost of property damage and physical injuries if they cause an automobile accident.
This article is intended as a comprehensive guide to automobile insurance in Maine, including the minimum requirements, the penalties for driving without insurance, and the legal options for those injured in an accident with an uninsured driver.
Does Maine have a fault-based insurance system?
Maine has a fault-based insurance system, meaning the insurance company of the driver who caused the accident is typically responsible for covering the personal injury damages that result, such as medical expenses, lost wages, and property damage. The accident victim can file a claim directly with the at-fault driver’s insurance company or a personal injury lawsuit against the at-fault driver.
This approach is in contrast to states that have no-fault insurance systems. In these states, each driver’s insurance company covers their policyholder’s damages, regardless of who caused the accident.
Minimum car insurance requirements in Maine
Maine law mandates that all drivers carry liability insurance in the following amounts:
- $50,000 for bodily injury or death of one person in any one accident.
- $100,000 for bodily injury or death of two or more persons in any one accident.
- $25,000 for injury to or destruction of property of others in any one accident.
To better understand what each of these amounts means, consider the following example:
Let's say you're involved in a car accident where the other driver, let's call him John, is at fault. You suffer physical injuries, and your car is damaged. John has the minimum liability insurance required in Maine.
- $50,000: The first number refers to the bodily injury coverage per person. This means John's insurance will cover up to $50,000 of your medical bills, pain and suffering, and other injury expenses.
- $100,000: The second number represents the total bodily injury coverage per accident. This limit comes into play if more than one person is injured in the accident. So, if you had two passengers in your car who were also injured, John's insurance would cover the medical expenses for all of you, but only up to a total of $100,000.
- $25,000: The last number refers to property damage coverage. In this scenario, John's insurance would cover the damage to your car up to a limit of $25,000.
If your damages exceed these coverage limits, you would need to seek the remaining compensation from John directly, which could involve filing a personal injury lawsuit or filing a claim under your underinsured motorist policy.
In addition to the minimum liability insurance described above, Maine requires drivers to carry the following coverage:
- MedPay: The law requires drivers to carry a minimum of $2,000 per person in medical payments coverage (commonly referred to as “MedPay”). This insurance covers medical expenses incurred by you and your passengers regardless of who’s at fault for the accident.
- Uninsured/Underinsured Motorist (UM) Coverage: The law requires drivers to carry UM coverage at a minimum of $50,000 per person/$100,000 per accident. This coverage protects you and your passengers if the other driver responsible for the accident has no insurance or if their liability limits are less than your damages.
Optional insurance coverage available in Maine
Along with additional liability, MedPay, and UM coverage, drivers in Maine can purchase the following optional coverage:
- Comprehensive coverage provides coverage for losses other than those caused by a collision (vandalism, theft, etc.).
- Collision coverage provides coverage for damage to your vehicle caused by an accident with another vehicle or an object (such as a fence).
Many insurance companies offer discounts to customers who buy multiple types of insurance from them. This is often referred to as “bundling.” For example, if you have your home insurance and auto insurance with the same company, you could qualify for a discount on one or both policies.
Bundling policies can not only lead to considerable savings, but it tends to simplify your insurance matters as you’re dealing with a single company.
What if I can’t find auto insurance coverage?
Maine's competitive auto insurance market makes finding coverage straightforward for drivers. However, a poor driving record may make it challenging to secure a policy. If that's the case, the Maine Automobile Insurance Plan could be a viable alternative.
The Maine Automobile Insurance Plan offers both the mandatory coverage required by law and optional coverage. Additional information about the Maine Automobile Insurance Plan can be found on the Automobile Insurance Plans Service Office website.
Penalties for driving without insurance in Maine
Driving without insurance in Maine carries significant penalties.
For a first offense, drivers face a fine of up to $500. Additionally, your license may be suspended. However, the most severe consequence of driving without insurance is that you will be personally liable for any damages that result from an accident that you cause.
Keep in mind that even if you don’t have the funds readily available to satisfy a judgment, the car accident victim can use several tools to collect the judgment. For instance, they could potentially garnish your wages, meaning that a portion of your earnings would be deducted directly from your paycheck until the debt is paid in full.
Additionally, the car accident victim could potentially seek a lien on your property, such as your home or car, which can force the sale of that property to satisfy the debt.
Is a friend or family member covered by my insurance if they borrow my vehicle?
In Maine, car insurance generally follows the vehicle, not the driver. If a friend or family member borrows your car and causes an accident, your insurance will typically cover the damages (though your friend or family member’s insurance may act as secondary coverage if the costs exceed your policy limit). This rule applies so long as the individual who borrowed your vehicle had permission to do so.
Five FAQs about auto insurance in Maine
Yes. Proof of insurance is required to register a vehicle in Maine.
The statute of limitations for personal injury lawsuits in Maine is six years from the date of the accident.
If you have a poor driving record and can’t find insurance coverage, you may be able to purchase coverage through the Maine Automobile Insurance Plan.
Your auto insurer can cancel your policy within the first 60 days for almost any reason. However, after this initial 60-day period, your auto insurance can only be canceled for one of the following reasons:
Nonpayment of your premium
Fraud or material misrepresentation
Violation of terms or conditions of the policy
Suspension of your license
When you purchase an auto insurance policy, you enter into a contract with the insurance company. If the insurance company violates its obligations under the contract, you can file a bad faith lawsuit against the company.
Understanding the nuances of car insurance laws in Maine is important for anyone driving in the state. While carrying minimum coverage fulfills the legal obligation, it might not provide comprehensive financial protection in the event of a significant accident. Considering additional coverage options and understanding your options if you’re involved in an accident with an uninsured driver could save you substantial financial and legal distress. For more information, reach out to an experienced car accident attorney.