An Act To Allow a Homeowner To Insure a Residence for Less than Actual Cash Value
Maine Legislature, Session 125, LD 1175
Committee: Insurance and Financial Services
Sponsors: FREDETTE, DAVIS
Amends: 24-A MRSA §3002, 24-A MRSA §3004-B

Legislative Document 
No. 1175 
H.P. 873 
House of Representatives, March 17, 2011 
An Act To Allow a Homeowner To Insure a Residence for Less than 
Actual Cash Value 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative FREDETTE of Newport. 
Cosponsored by Representative: DAVIS of Sangerville. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §3002, sub-§1, as amended by PL 1989, c. 316, §1, is 
further amended to read: 
1.  No An insurer may not issue fire insurance policies on property in this State other 
than those of the Maine standard fire insurance policy, which shall must contain the 
following consideration and insuring clause, assignment clause and the general conditions 
and stipulations set forth after these consideration, insuring and assignment clauses: 
Consideration and Insuring Clause  
In Consideration of the Provisions and Stipulations herein or added hereto and of the 
premium above specified, this Company, for the term of .......... from .......... at 12:01 a.m. 
(Standard Time) to .......... at 12:01 a.m. (Standard Time) at location of property involved, 
to an amount not exceeding the amount(s) above specified, does insure .......... and legal 
representatives, to the extent of the actual cash value of the property at the time of loss, 
but not exceeding the amount which it would cost to repair or replace the property with 
material of like kind and quality within a reasonable time after such loss, without 
allowance for any increased cost of repair or reconstruction by reason of any ordinance or 
law regulating construction or repair, and without compensation for loss resulting from 
interruption of business or manufacture, nor in any event for more than the interest of the 
insured or alternative insured value, against all DIRECT LOSS BY FIRE, LIGHTNING 
AND BY REMOVAL FROM PREMISES ENDANGERED BY THE PERILS 
INSURED AGAINST IN THIS POLICY, EXCEPT AS HEREINAFTER PROVIDED, 
to the property described herein while located or contained as described in this policy, or 
pro rata for five days at each proper place to which any of the property shall necessarily 
be removed for preservation from the perils insured against in this policy, but not 
elsewhere.  
Assignment Clause  
Assignment of this policy shall not be valid except with the written consent of this 
Company. 
This policy is made and accepted subject to the foregoing provisions and stipulations 
and those hereinafter stated, which are hereby made a part of this policy, together with 
such other provisions, stipulations and agreements as may be added hereto, as provided in 
this policy.  
General Conditions and Stipulations  
Concealment, fraud.  This entire policy shall be void if, whether before or after a loss, 
the insured has willfully concealed or misrepresented any material fact or circumstance 
concerning this insurance or the subject thereof, or the interest of the insured or 
alternative insured value therein, or in case of any fraud or false swearing by the insured 
relating thereto. 
Uninsurable and excepted property. This policy shall not cover accounts, bills, 
currency, deeds, evidences of debt, money or securities; nor, unless specifically, named 
hereon in writing, bullion or manuscripts. 
Perils not included. This Company shall not be liable for loss by fire or other perils 
insured against in this policy caused, directly or indirectly by: (a) enemy attack by armed 
forces, including action taken by military, naval or air forces in resisting an actual or an 
immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) 
revolution; (f) civil war; (g) usurped power; (h) order of any civil authority except acts of 
destruction at the time of and for the purpose of preventing the spread of fire, provided 
that such fire did not originate from any of the perils excluded by this policy; (i) neglect 
of the insured to use all reasonable means to save and preserve the property at and after a 
loss, or when the property is endangered by fire in neighboring premises; (j) nor shall this 
Company be liable for loss by theft. 
Other insurance. Other insurance may be prohibited or the amount of insurance may 
be limited by endorsement attached hereto. 
Conditions suspending or restricting insurance. Unless otherwise provided in writing 
added hereto this Company shall not be liable for loss occurring (a) while the hazard is 
increased by any means within the control or knowledge of the insured; or    
(b) while a described building, whether intended for occupancy by owner or tenant, is 
vacant or unoccupied beyond a period of sixty consecutive days; or 
(c) as a result of explosion or riot, unless fire ensues, and in that event for loss by fire 
only. 
Other perils or subjects. Any other peril to be insured against or subject of insurance 
to be covered in this policy shall be by endorsement in writing hereon or added hereto. 
Added provisions.  The extent of the application of insurance under this policy and of 
the contribution to be made by this Company in case of loss, and any other provision or 
agreement not inconsistent with the provisions of this policy, may be provided for in 
writing added hereto, but no provision may be waived except such as by the terms of this 
policy is subject to change. 
Waiver provisions. No permission affecting this insurance shall exist, or waiver of 
any provision be valid, unless granted herein or expressed in writing added hereto. No 
provision, stipulation or forfeiture shall be held to be waived by any requirement or 
proceeding on the part of this Company relating to appraisal or to any examination 
provided for herein. 
Cancellation of policy.  This policy shall be cancelled at any time at the request of the 
insured, in which case this Company shall, upon demand and surrender of this policy, 
refund and the excess of paid premium above the customary short rates for the expired 
time.  This policy may be cancelled at any time by this Company by giving to the insured 
a ten days' written notice of cancellation with or without tender of the excess of paid 
premium above the pro rata premium for the expired time, which excess, if not tendered, 
shall be refunded on demand.  Notice of cancellation shall state that said excess premium 
(if not tendered) will be refunded on demand. 
Mortgagee interests and obligations. If loss hereunder is made payable, in whole or in 
part, to a designated mortgagee not named herein as the insured, such interest in this 
policy may be cancelled by giving to such mortgagee a ten days' written notice of 
cancellation.  
If the insured fails to render proof of loss such mortgagee, upon notice, shall render 
proof of loss in the form herein specified within sixty (60) days thereafter and shall be 
subject to the provisions hereof relating to appraisal and time of payment and of bringing 
suit. If this Company shall claim that no liability existed as to the mortgagor or owner, it 
shall, to the extent of payment of loss to the mortgagee, be subrogated to all the 
mortgagee's rights of recovery, but without impairing mortgagee's right to sue; or it may 
pay off the mortgage debt and require an assignment thereof and of the mortgage. Other 
provisions relating to the interests and obligations of such mortgagee may be added 
hereto by agreement in writing.  
Pro rata liability. This Company shall not be liable for a greater proportion of any 
loss than the amount hereby insured shall bear to the whole insurance covering the 
property against the peril involved, whether collectible or not.  
Requirements in case loss occurs. The insured shall give immediate written notice to 
this Company of any loss, protect the property from further damage, forthwith separate 
the damaged and undamaged personal property, put it in the best possible order, furnish a 
complete inventory of the destroyed, damaged and undamaged property, showing in 
detail quantities, costs, actual cash value and amount of loss claimed; and within sixty 
days after the loss, unless such time is extended in writing by this Company, the insured 
shall render to this Company a proof of loss, signed and sworn to by the insured, stating 
the knowledge and belief of the insured as to the following: The time and origin of the 
loss, the interest of the insured or alternative insured value and of all others in the 
property, the actual cash value of each item thereof and the amount of loss thereto, all 
encumbrances thereon, all other contracts of insurance, whether valid or not, covering 
any of said property, any changes in the title, use, occupation, location, possession or 
exposures of said property since the issuing of this policy, by whom and for what purpose 
any building herein described and the several parts thereof were occupied at the time of 
loss and whether or not it then stood on leased ground, and shall furnish a copy of all the 
descriptions and schedules in all policies and, if required, verified plans and 
specifications of any building, fixtures or machinery destroyed or damaged. The insured, 
as often as may be reasonably required, shall exhibit to any person designated by this 
Company all that remains of any property herein described, and submit to examinations 
under oath by any person named by this Company, and subscribe the same; and, as often 
as may be reasonably required, shall produce for examination all books of account, bills, 
invoices and other vouchers, or certified copies thereof if originals be lost, at such 
reasonable time and place as may be designated by this Company or its representative, 
and shall permit extracts and copies thereof to be made.  
Appraisal.  In case the insured and this Company shall fail to agree as to the actual 
cash value or the amount of loss, then, on the written demand of either, each shall select a 
competent and disinterested appraiser and notify the other of the appraiser selected within 
twenty days of such demand. The appraisers shall first select a competent and 
disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on 
request of the insured or this Company, such umpire shall be selected by a judge of a 
court of record in the state in which the property covered is located. The appraisers shall 
then appraise the loss, stating separately actual cash value and loss to each item; and, 
failing to agree, shall submit their differences, only, to the umpire. An award in writing, 
so itemized, of any two when filed with this Company shall determine the amount of 
actual cash value and loss. Each appraiser shall be paid by the party selecting that 
appraiser and the expenses of appraisal and umpire shall be paid by the parties equally.  
Company's options. It shall be optional with this Company to take all, or any part, of 
the property at the agreed or appraised value, and also to repair, rebuild or replace the 
property destroyed or damaged with other of like kind and quality within a reasonable 
time, on giving notice of its intention so to do within thirty days after the receipt of the 
proof of loss herein required.  
Abandonment. There can be no abandonment to this Company of any property.  
When loss payable. The amount of loss for which this Company may be liable shall 
be payable sixty days after proof of loss, as herein provided, is received by this Company 
and ascertainment of the loss is made either by agreement between the insured and this 
Company expressed in writing or by the filing with this Company of an award as herein 
provided.  
 Suit.  No suit or action on this policy for the recovery of any claim shall be 
sustainable in any court of law or equity unless all the requirements of this policy shall 
have been complied with, and unless commenced within two years next after inception of 
the loss.  
Subrogation. This Company may require from the insured an assignment of all right 
of recovery against any party for loss to the extent that payment therefor is made by this 
Company. 
Sec. 2.  24-A MRSA §3004-B is enacted to read: 
§3004-B.  Alternative insured value 
1.  Alternative insured value.   "Alternative insured value," as used in section 3002, 
means the amount at which a home that is the primary residence of the insured person 
may be insured as an alternative to actual cash value.  The alternative insured value may 
not be more than the actual cash value of the home.  In order to insure a home at the 
alternative insured value, the insurer and insured person shall execute a rider to the policy 
that indicates the insured person’s choice of insuring at the alternative insured value.  The 
rider must be in a form approved by the superintendent.  The superintendent shall adopt 
rules to establish the approved form for an alternative insured value rider.  Rules adopted 
pursuant to this subsection are routine technical rules as defined by Title 5, chapter 375, 
subchapter 2-A. 
SUMMARY 
This bill allows a homeowner to insure the primary residence of the homeowner for 
an alternative insured value, which is no more than the actual cash value of the residence.  
It requires the execution of a rider that meets the requirements of the Superintendent of 
Insurance within the Department of Professional and Financial Regulation to indicate the 
homeowner’s choice of insuring at the alternative insured value.  It requires the 
superintendent to adopt routine technical rules to establish the approved form for the 
alternative insured value rider.