The national guide covers the basic concepts of property and casualty insurance: perils and hazards, actual cash value and replacement cost, coinsurance, negligence and the standard policy structure. Maine adds rules of its own. 24-A M.R.S. 3002 requires the Maine standard fire policy, and the exam asks about its terms directly. Maine also has its own comparative negligence statute. This guide covers both. The ISO forms are in the national guides. Quote marks below are short phrases from the statutory form.

The Maine standard fire policy (24-A M.R.S. 3002)

• An insurer may not issue a fire policy on Maine property except on the Maine standard form. Endorsements may adapt it.
• Policy period: 12:01 a.m. standard time at the property's location.
• Insuring agreement: covers the actual cash value at the time of loss. The payment can't exceed the cost to repair or replace with like kind and quality, or the insured's interest. There's no extra payment for building code ("ordinance or law") costs or business interruption.
• Perils: fire, lightning, and removal of property to protect it from those perils. Other perils must be added by endorsement.
• Removed property is covered pro rata for 5 days at each place it's moved to.
• Property not covered: accounts, bills, currency, deeds, evidences of debt, money and securities. Bullion and manuscripts are covered only if specifically named.

Perils and conditions that suspend or exclude coverage

• Excluded perils:
  • war-type perils
  • certain orders of civil authority
  • the insured's neglect to save property after a loss
  • theft
• Explosion or riot: not covered unless fire follows, and then only the fire damage.
• Suspension: no coverage while a building is vacant or unoccupied more than 60 consecutive days, or while the hazard is increased by means within the insured's control or knowledge.
• Concealment or fraud: willful concealment or misrepresentation of a material fact, or fraud or false swearing, voids the whole policy.

Cancellation under the fire policy

Maine's cancellation control acts (PICCA for owner-occupied homes and 3007 for other property) add limits on top of the form. See the Maine Homeowners guide for PICCA.

Loss conditions

• After a loss: give immediate written notice, protect the property and prepare an inventory. File a signed, sworn proof of loss within 60 days.
• If the insured doesn't file proof, the mortgagee may file it within 60 days after notice.
• Appraisal:
  • On written demand, each side picks an appraiser within 20 days.
  • If the appraisers can't agree on an umpire within 15 days, a judge picks one.
  • An award agreed by any two sets the loss.
  • Each side pays its own appraiser and splits the umpire and other costs equally.
• Insurer's options: take the property at agreed or appraised value, or repair or replace it. The insurer must give notice within 30 days of the proof of loss.
• No abandonment of property to the insurer.
• Payment is due 60 days after proof of loss and agreement or appraisal (3002; 24-A M.R.S. 2436).
• Pro rata liability: the insurer pays only its share of the total insurance on the property, whether collectible or not.
• Suit: must be filed within 2 years after the loss.
• Assignment needs the insurer's written consent.

Commercial property cancellation (24-A M.R.S. 3007)

Section 3007 covers property policies other than PICCA policies, surplus lines and assigned risk plans.

• Midterm cancellation is allowed only for:
  • nonpayment
  • fraud or material misrepresentation
  • a substantial change in the risk
  • failure to follow reasonable loss-control recommendations
  • substantial breach
  • a solvency determination by the Superintendent
• Nonrenewal isn't effective until 30 days after the insured receives written notice.
• Renewal changes: if the insurer didn't give proper notice of new terms or rates, the insured may cancel the renewal within 30 days. Earned premium is then figured pro rata at the lower of the old or new rate.
• Hearing: the insured may ask for one within 45 days of a cancellation notice. The insurer bears the burden of proof.

Comparative negligence (14 M.R.S. 156)

On the liability side, Maine reduces a claimant's damages for the claimant's own share of fault. The jury makes the reduction in dollars, not by percentage. A claimant found equally at fault recovers nothing. Details are in the Maine Casualty Insurance Basics guide.

Reinsurance and surplus lines

Maine recognizes reinsurance, but reinsurance can't be placed under the surplus lines law (24-A M.R.S. 2002-A(2)).

Common exam traps

• Maine still has a statutory standard fire policy and insurers must use it.
• The fire policy pays ACV. Vacancy suspension starts after 60 consecutive days.
• Removed property: 5 days pro rata.
• Proof of loss: 60 days. Payment: 60 days after proof and agreement. Suit: within 2 years.
• Insurer cancels on 10 days' notice with a pro rata refund. The insured gets short rate.
• Appraisers chosen within 20 days. Umpire within 15 days, or a judge chooses.
• Equally at fault = no recovery.