Ask the Experts: How Do I Best Insure My Island Home?

Allen Insurance and Financial agent Cale Pickford on securing insurance for island properties in Maine.

Cale Pickford of Allen Insurance and Financial
Photo by Dave Waddell

Of Maine’s thousands of unbridged islands, 15 are inhabited year-round, with a few dozen more hosting seasonal dwellings. Their uniqueness is one reason that insuring island properties is more challenging than on the mainland. But Cale Pickford believes that where there are challenges, there are opportunities. The director of Compass Group, a division of Allen Insurance focused on hard-to-place policies — including island, coastal, and higher-value homes — shares a few insights.

Why is it harder to insure island homes? 

Insurance companies weigh risks. On an island, if there’s a loss, it costs a lot more to rebuild than it would on the mainland. Also, not all islands have a fire department. And if they do have one that’s recognized as meeting the minimum requirements of the insurance industry, they don’t have any sort of mutual aid from neighboring fire departments, like they would on the mainland. Insurance companies rely on past claims data to calculate future rates, and for most insurers, there simply isn’t enough information on Maine island homes. 

So should island homeowners expect higher premiums?

Invariably. The average cost to settle a claim is going to be much higher than it would be on the mainland. Also, because there’s less competition in the marketplace for these policies, you can expect higher rates. 

What’s your role in educating insurance companies about island life? 

We try to identify insurers that see opportunities where other companies see problems. We’ve gone as far as to take representatives of insurance companies to visit some Maine islands so they can see the homes that are there and understand that, while on its surface, it can seem like a bad bet for an insurer to cover these homes, it’s really an opportunity. The nature of island communities is that there are multiple generations of people who know each other. We tell insurers that this is something that has good controls through a long history of neighbors helping neighbors. That can help avoid claims.

What advice do you give to homeowners to make them more attractive to insurance companies?

One thing you can consider is installing alarms in the home, including fire, burglar, and low-temperature alarms. These can be highly beneficial in terms of pricing and savings, and are required in many cases. Another thing is to make sure you have a plan for the winter. If the home won’t be occupied year-round, you need to drain the plumbing. That way, if the furnace were to fail or power were to go out, it’s not going to result in frozen plumbing and burst pipes. Finally, document everything you do to the home so that you have an understanding of how much insurance you would need to be made whole in the event of a loss.

34 Elm St., Camden, ME 04843. 800-439-4311.