State Rep. Seeks Increase for Maine Auto Insurance Minimums

Current and Proposed Maine Liability Minimums ImageDespite being a representative in a state with one of the highest minimum liability standards for auto insurance in the nation, Maine state Rep. David Cotta wants to push those state-required minimums even higher, and he has introduced legislation to do so.

All Maine auto insurance policies must currently provide policyholders with protection of at least up to $50,000 for bodily injury damages to one person and $100,000 for damages to two or more people, as well as at least up to $25,000 for property damage protection and $2,000 in medical payments coverage. This is commonly denoted as 50/100/25 coverage.

But LD 125, introduced this year by Rep. Cotta, would more than double those minimums.

If the bill is passed, they would go from 50/100/25 with $2,000 in medical payment protection to 100/250/50 with $20,000 in medical payments protection.

Maine is already the state with the highest minimum protections in the country. Although Alaska has identical minimum liability limits, state law there does not require residents to purchase medical payments coverage.

The majority of states require 25/50 coverage for bodily injury liability and either $10,000 or $25,000 in property damage liability, and recent bills to increase minimums have stagnated in the Illinois, Ohio and Pennsylvania state legislatures.

In Wisconsin, Democrat-initiated changes that raised state-required minimums to 50/100/15 are likely to soon be rolled back by the new Republican majorities in both the senate and assembly there.

Most of these pushes to raise minimums have been met with loud opposition from the insurance industry claiming that higher minimums push the cost of coverage higher, which restricts consumer choice and even forces some out of the market.

But Maine not only ranks as one of the highest for minimum limits, it surprisingly also ranks as one of the states with the cheapest average policy rates. It was ranked by the National Association of Insurance Commissioners as having the ninth lowest average expenditure on car coverage in the nation in 2008, and an online auto insurance company recently announced that it had the second lowest median policy rate in the nation in 2010.

Whether this fact will help undercut criticism that the bill would unfairly raise premiums remains to be seen; the bill still remains in the first stages of the legislative process.

There has also been a handful of other car insurance–related legislation submitted to the Maine legislature this session.

One bill would require insurers to provide policyholders with a copy of their credit information and an explanation of how that information affected their rates if the insurer used it in the rating process. Another would require policy vendors to inform customers that they can purchase uninsured motorist coverage with protection for up to $2 million in damages.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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