Michigan Home Insurance

Michigan’s home prices fell dramatically in the state after 2008, and the housing market has been slow to recover. That said, insurance rates also dropped and remained fairly steady after the housing bubble burst. So if you can afford to weather the market’s slow return, covering your property in Michigan, at least, is cheaper than in many other states. The Simple Dollar has collected resources and guides for Michigan’s homeowners to understand how this might affect their current policies.

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Stats in Your State

Affordable insurance is important in a state with as many extreme weather patterns as Michigan. Property damage from winter storms and harsh cold fronts is diverse, owners should consider their property’s unique threat from flood, fire and wind that can be brought on by a cold snap. Read on to see what the typical costs and coverage rates of a Michigan residence are today.

Homeowner Insurance Premiums

From 1999 to 2008, the average home insurance premium in Michigan risen by over 150%, from $415 at the start of the decade to roughly $714 in 2008. Despite the increase, the average Michigan home insurance rates have remained at or below the national average each year.

Renter Insurance Premiums

Similar to home insurance rates, renters insurance rates in Michigan have been consistently lower than the national average from 1999 to 2008, usually within $5 or $10 of the national average.

Existing Home Sales

Along with the U.S. as a whole, home sales in Michigan spiked in the early half of the decade along with the housing bubble, before taking a significant downturn during the latter half of the decade. The high of the decade was 213,400 homes sold in 2004, down to a low of 150,800 in 2010.

Flood Insurance in Region

In the year between October 2011 and September 2012, approximately 232 Michigan residents filed flood claims for over $1.7 million in damages. Compared with the rest of the great lakes states, Michigan ranks second only to Wisconsin in terms of the least number of flood victims and damages.

Homes Built

Michigan has seen steady development of new homes throughout the 20th century, mostly as a direct result of the steady expansion of the American auto industry and other manufacturing jobs. Unlike most other states, each decade in the 20th century shows similar growth, indicating a steady economy for many decades. With the decline of the auto industry, however, those numbers can be expected to curb.

Rules in Your State

While the Insurance Commissioner has set forth basic regulations for insurance companies in recent years, very little of the legislation directly applies to the housing market or homeowners insurance. Generally speaking, the following regulations apply to property insurance and consumer’s rights. For more information on homeowners insurance, see the subsequent resources and representatives section.

Michigan Insurance Statutes and Regulations: Following the implementation of the insurance code in 1956, the state’s Insurance Commissioners have throughout the years set forth statutes and regulations to further regulate how insurers do business. While few address property insurance directly, others outline basic payments of claims and administrative basics.

Michigan Insurance Code: Basic Property Insurance: This excerpt from the insurance code addresses property insurance in its most basic form, and outlines how insurers should handle their business and property insurance rates in Michigan. It was crafted in 1956 and addresses the basics, but don’t expect this antiquated piece of legislation to address any of the recent developments due to the housing bubble -- you’ll find anything newer in the statutes and regulations linked above, or in future legislation.

Michigan Insurance Code: Unfair and Prohibited Trade Practices: This section of the insurance code sets out unfair and prohibited trade practices and acts, as well as frauds and deceptions for both insurers and consumers. Most insurers are probably in compliance with this section of the code on a day to day basis, but if you feel like your rights have been compromised or you’ve been treated unfairly, check through this section or consult with an attorney.

Michigan Consumer Protection Act: This act was implemented in 1976 and outlines basic protections and rights for consumers in Michigan. While it doesn’t specifically address insurance, it generally applies to consumers interacting with businesses and corporations, and how their rights may be protected.

Representatives & Resources in Your State

Use the following links and resources to learn more about homeowners insurance in Michigan, and to get in touch with your local government about any issues or concerns you may have. The DIFS is a valuable resource for consumers, and has additional information for residents who want to learn more about how home insurance works in Michigan.

Michigan Department of Insurance and Financial Services (DIFS)
PO Box 30220
Lansing MI 48909-7720
Contact Information for DIFS
DIFS Consumer complaint resource
DIFS: Foreclosure Resources
DIFS Consumer Guides
The Insurance Commissioner has put together a number of guides to outline various topics on insurance in Michigan. These pamphlets and guides should answer most questions you might have and are designed to educate consumers further in an easy-to-understand format.

Federal Emergency Management Administration: Region 5
While Michigan doesn’t suffer from earthquakes and wildfires, severe storms and tornados are regular causes of disaster and emergency in Michigan. Tornados in the spring and summer have caused hundreds of deaths in the past 50 years, and harsh winters contribute to difficult times for many of the state’s residents. Use the above link to get in touch with the regional FEMA offices for disaster relief.