Insurance Quotes  >  Home Owners Insurance  > Michigan

In Michigan, the Essential Insurance Act enables all its citizens the opportunity to attain homeowners insurance. You cannot be denied cover based on any of the following: the age of a house, location, and ore type of neighbourhood you live in.

If you are ineligible for coverage, you can still get coverage from the Michigan Basic Property Insurance Association. Enquire what situations make you ineligible for coverage. Some of those situations are listed below:

1. You can be denied coverage if you are accused of committing or trying to commit arson, being destructive or dangerous.
2. You can be denied if you have been denied payment of a claim, due to evidence of arson or fraud on your part in the past five years.
3. You can be denied coverage if the property you are trying to insure is used for dangerous or illegal purposes.
4. You can be denied coverage on refusal to purchase what is the minimum cover, for the type of house you want to insure.
5. You can be denied coverage if your home insurance has been cancelled because of non-payment of premium in the past two years.
6. You can be denied coverage if the value of your property does not meet the minimum requirements of $7,500 for repair cost coverage, and $15,000 for replacement cost coverage.
7. You can be denied coverage if you have not paid your property tax for the past 2 years.
8. You can be denied coverage if the insurance you are trying to buy, requires that you are a member of a specific group or organization, and you do not join the organization.

State law maintains that you cannot be denied coverage by any insurance carrier in Michigan. In the unlikely event of this happening, you can ask for a written explanation. Contact the Michigan State Insurance Commissioner’s office for more information.

How are homeowner’s insurance rates calculated?

Michigan’s home insurance rates are monitored and controlled by the state law on a competitive basis. This indicates that rates cannot be excessively high as long as there is fair competition among different resident companies. There are about a 100 insurance carriers in Michigan today all of whom compete by offering a variety of rates and services. Insurers are however barred from discussing the rates they are setting with each other.

Types of policies

There are basically two types of homeowner’s policies:

1. Non-group (or individual) and
2. Group.

A group policy is one that is offered to a group or members of an association. The cover provided by both these types are similar however, different companies offer different coverage options in their policies.

Factors for rating

State law also decides on the factors that play a part when companies set the rates. There are many more rating factors prevalent for the group policies than for non-group policies.

The type of house or the materials used in its construction (wood or brick, for example), the age of the home, the condition, number of years the owner has insured with the insurer, whether the owner has multiple policies with the insurer (for example, both homeowners and automobile policies) etc are common.

In case of damage or loss a claim is filed by the insured and the company after verifying the loss makes the payment.

Setting Premiums

In setting premiums too the companies must first decide how much they would be willing to pay out for the repair or replacement of homes. It is the rising amount for claims filed which pushes up the premiums annually. When large numbers of claims are filed, typically following bad weather companies have to shell out more than they expected to pay.
This increased frequency of claims and repeated claims adds to the hike in premiums. Michigan insurance companies have experienced an increased number of weather-related claims over the past several years.

For individual policies, insurance carriers are required to provide consumers with a description of the rating classifications used in setting the rates. This notification must be dispatched with every instance of renewal of the insurance. In case the customer feels that the rates he is being charged are incorrect, the insurance carrier is obliged to provide him details of the process they resort to, to arrive at the rates. Under this process, any consumer believing that the premium is incorrect based upon the rating classifications can ask for a review of the rate by the company. The Office of Financial and Insurance Services can review the rate if the consumer believes it still is incorrect after the company review.