Maine is one of the most geographically diverse states in the US — and location has a big impact on the cost of homeowners insurance. For example, a new build in Portland will cost more and require different coverage than a rustic cabin located in the middle of the forest.

However, there are a few universal traits that make an insurance company great, regardless of your home’s exact coordinates. We ranked Maine’s insurance providers based on a couple of key metrics: affordability, customer service, financial standing, and coverage options. After extensive research and interviews with experts, we whittled down the list to just a handful of top homeowners insurance companies in Maine.

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Our Top Recommendations for Homeowners Insurance in Maine

Freshome’s Recommendations: State FarmAmicaLiberty Mutual.

We analyzed different insurance companies and identified the top three providers in terms of affordability and coverage. We also filtered our top picks through another set of stringent criteria:Identifying the right insurance company for your home can be a daunting experience. To save you from expending an unnecessary amount of time and effort, we’ve done some of the research for you.

  • J.D. Power Overall Satisfaction rating of three stars or higher
  • A.M Best financial strength rating of B+ or higher
  • A high financial strength rating from Moody’s and/or Standard & Poor’s

Our insurance industry expert also provided valuable insight on how you can lower your premium.

Before we could gather any quotes, we needed a home. Our fictitious house was a 1,645-square-foot, single-family home with three bedrooms and two baths. It was built in 1948 and has a detached two-car garage. The sample coverage for this property includes:

  • Coverage A or dwelling coverage – $216,400
  • Coverage B or other structures’ coverage – $21,640
  • Coverage C or personal property coverage – $162,300 ($108,200 in Liberty Mutual)
  • Coverage D or loss of use coverage – $64,920 ($43,280 in Liberty Mutual)
  • Coverage E or liability limit – $300,000
  • Coverage F or medical payments – $1,000
  • Deductible – $1,000
  • This quote is based on the assumption that there are no alarm systems installed in this house.
  • This quote also assumes that the closest fire department is less than five miles from the property and there is a fire hydrant within 1,000 feet.

We were looking for an HO3 policy. This is the most comprehensive and popular policy for homeowners (and we’ll go into more detail on it below).

Our Quotes
Amica$703 Per Year
State Farm$1,184 Per Year
Liberty Mutual$1,444 Per Year

Out of our top picks, Amica was the best in terms of affordability and coverage. For a much lower premium, this company offers higher coverage amount for personal property and loss of use when compared to Liberty Mutual. Two other great features? It has easy-to-use online tools and friendly agents that held our hands through the quote-gathering process.

Our second pick is State Farm, as its premium is lower than Liberty Mutual and its coverage is also better. Many State Farm customers have also expressed satisfaction over the promptness of claims settlement.

However, keep in mind that this quote is for a fictitious home; it’s only meant to give you an idea of an average cost. Be sure to call around and gather several quotes for your home’s specifications. It’s also a good idea to talk to an independent insurance agent before choosing the homeowners insurance that’s right for you.

What You Should Know Before Getting a Quote

Good news — homeowners insurance is relatively affordable in Maine, compared to many other states. However, the rates are slowly inching up in The Pine Tree State, due to the increased possibility of severe storms in the coastal areas (we’ll go into more detail on that below).

According to Cale Pickford of Allen Insurance and Financial, there are three factors that contribute to this increase in homeowners insurance premium.

  • More claims. The number of claims have increased all over the country due to frequent occurrence of natural disasters, and this has directly translated to higher premiums nationwide.
  • Lower return on investments. Every insurance company invests a portion of its revenue to make up for the losses paid out in the form of claims. Over the last few years, returns from these investments have been low because of a sluggish economy. To make up for this difference, insurance companies have increased their premiums.
  • Increased cost of reinsurance. Insurance companies buy insurance to protect themselves from financial losses that occur due to major natural disasters like hurricanes and tornadoes. Since this cost of reinsurance has increased, the cost is passed on to consumers.

If you’re already living in the coastal areas of Maine or if you plan to buy a property along the Atlantic coast, here are some things you can do to lower your premium:

  • Bundle. If you buy home and auto insurance from the same provider, you’re likely to get a discount, sometimes even as high as 20 percent.
  • Avoid making claims. If you haven’t filed a claim in the last 10 years, you’re considered a safe homeowner. To reward you, insurance companies offer a discount that can reduce your premium by up to 10 percent.
  • Buying a new home. New homes are considered to be a safer investment than older homes because the materials are new and will last for a longer time. Also, there is no wear and tear yet, which greatly reduces the chance for claims. This is why insurance companies offer a discount of up to 20 percent for homes that are less than 10 years old.
  • Credit score. Credit scores affect your premium; higher scores mean lower premiums and vice versa. So, it’s a good idea to review your credit report and look for ways to boost your score now.
  • Higher deductible. Your premium will be lower if you choose to have a higher deductible. A deductible is the amount you’ll have to pay out of pocket before the insurance company starts paying any of your losses. Though a higher deductible can lower your premium, be sure it’s a number you can comfortably pay in the event of a disaster.
  • Lower replacement cost. If you lower your replacement cost, your premium will obviously come down. However, this is not always a good idea. Replacement cost is the amount the insurance company will pay if your home has to be rebuilt from scratch. If you opt for a lower replacement cost, the company will only pay the agreed lower amount, and you’ll have to pay the remaining. This is why lowering your replacement cost is not considered a sound financial decision.

Why Are Maine’s Rates So Low?

Maine has one of the lowest homeowners insurance premium in the US. According to the Insurance Information Institute, the average annual premium in Maine is $776. That’s $320 lower than the national average of $1,096 per year. Only nine states in the US have lower home insurance premium than Maine.

One of the reasons for this low rate is the competitiveness of Maine’s insurance market. In 2014, there were 95 insurance companies providing homeowners insurance in the state. The top 10 companies accounted for a market share of only 49 percent; the leading carrier has only a small market share of nearly 12 percent. This is great for consumers, as it means your insurance companies have to keep their rates affordable in order to remain competitive.

However, the last few years have seen a steady increase in premiums in Maine. In fact, it is estimated that the cost of homeowners insurance in Maine, especially in the coastal areas, has gone up by 68 percent over the last decade. Many homeowners in Maine think this is unfair because the Maine coast hasn’t been hit by a severe storm since 2007. During Hurricane Sandy, only states located further south (such as New York and New Jersey) were affected — there was almost no damage in Maine.

Still, many homeowners in the coastal areas are finding it increasingly difficult to get adequate homeowners insurance. Experts believe that this increased premium is a spillover effect from Sandy as insurance providers are more squeamish than before when it comes to insuring waterfront properties.

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FAQs

What is the ideal coverage limit?

Most insurance companies allow you to choose your coverage, and it is typically 80, 90, or 100 percent of the replacement cost of your home. It’s always a good idea to go for the highest possible coverage as it will protect you against financial losses. For example, if the replacement cost of your home is $100,000, you must insure the property for at least $100,000 to recover the full amount from the insurance company, in the event of a loss. If you opt for only 80 percent coverage, then the insurance company will pay only $80,000 minus the deductible, and you’ll have to pay the remaining.

What about flood insurance?

Homeowners who need flood coverage should buy it separately from an agent working with the National Flood Insurance Program. It’s highly recommended you buy flood insurance as the possibility of floods is high, especially along Maine’s coast.

What are “loss control recommendations”?

Insurance companies are entitled to inspect the property that is being insured. Sometimes, inspectors may request to inspect the interiors to get a better understanding of the home’s condition. Based on this inspection, the inspector will make a set of recommendations called “loss control recommendations” that can include any repair or changes that have to be made to reduce the chances of loss. Failure to comply with these recommendations can cause the insurer to increase your premium or in some cases, even cancel the policy.

Take Action

Maine has one of the lowest rates of homeowners insurance in the country, and much of it can be attributed to the competitiveness of the insurance industry and a healthy supply-demand ratio. However, the cost of premiums are rising because of the increased frequency of Atlantic storms, and this increase can eat into your financial budget over time. This is why it’s best to shop around and get several quotes before signing on the dotted line.

Freshome’s Recommendations: State FarmAmicaLiberty Mutual.

Compare Homeowners Insurance Rates

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