What is Home Insurance in Michigan?

Home insurance in Michigan is financial protection purchased by residential property owners or tenants to cover expenses in the event that unexpected incidents damage their buildings and personal belongings. Although home insurance is not required by law in Michigan, the Essential Insurance Act describes residents who are eligible to buy it. According to the Act, eligible persons must be homeowners, renters, or landlords who own or rent a house, a condominium, a mobile home, or multiple dwelling units. Such persons can get the following home insurance coverages:

• Dwelling coverage
• Personal belongings
• Attached or other structures
• Additional living expenses
• Personal liability coverage
• Optional or special coverage

Home insurance can cover medical expenses that arise when other people suffer injuries in your home. It will also cover legal fees when other persons sue you for injury they sustain in your home. Before deciding to buy residential property insurance, it is important to consult a knowledgeable P&C insurance agent in Michigan. Property and casualty insurance agents in the state are licensed by the Michigan Department of Insurance and Financial Services (DIFS). They work closely with clients to determine the suitable home insurance coverage for their needs. Policyholders who have issues with their insurance agents or companies in Michigan can file complaints with the DIFS online or by calling 877-699-6442.

Why Do We Need Residential Property Insurance in Michigan?

The State of Michigan is home to more than 10 million residents with over 4 million housing units, according to recent data from the U.S. Census Bureau. Most homeowners who occupy 71% of Michigan homes are required by mortgage lenders to purchase residential property insurance. A mortgage lender needs to protect investments against possible losses due to vandalism, fire, or other disasters. As such, most mortgage agreements often contain home insurance requirements.

Landlords may require tenants who live in 29% of Michigan rented homes to get renters insurance to avoid liability claims from tenants and property damage claims from a fire or other covered losses. While landlords require renters insurance as a method of lowering their risks, tenants can also benefit from it to avoid out-of-pocket payments for unforeseen insurable incidents.

Getting home insurance in Michigan will help residents protect their dwelling units and contents from all forms of property crimes. According to the Michigan Incident Crime Reporting (MICR), more than 95,000 larceny crimes were reported to local enforcement agencies in 2020. The report showed that 38.8% (37,109 cases) of these crimes took place in residential properties. Residential property insurance can pay insureds when their building is damaged by vandalism, or attached structures suffer similar property crimes. It can also cover the insured’s personal belongings, like furniture, jewelry, clothes, and home appliances, which may be affected by these property crimes.

Michigan residents frequently experience property losses caused by natural disasters and poor weather. This includes wildfires, floods, hurricanes, severe storms, tornadoes, earthquakes, and sinkholes. While typical home insurance will cover damages caused by wildfires and hurricanes, residents may need to buy separate policies to pay for flood and earthquake damage. While Michigan property insurance may not completely enhance your home’s ambience, it does make sure that you will be supported financially in the event of a loss. Hence, you should speak with an experienced P&C insurance agent in Michigan who can assess your location-specific needs for house insurance. State-licensed insurance agents can assist you in finding the most cost-effective homeowners insurance policy for your needs.

How Does Residential Property Insurance Work in Michigan?

Typically, residential property insurance is provided by property and casualty insurers in Michigan. These insurers provide insurance products like auto insurance, home insurance, and professional liability insurance. There are currently 65 P&C insurance companies in Michigan, according to a recent report by the Insurance Institute Information (III). The report also showed that the total direct premium written by these companies in 2021 was over $21 billion. The Michigan Department of Insurance and Financial Services is responsible for regulating the activities of these insurers.

Purchasing home insurance through a licensed insurance agent is more beneficial than purchasing it directly from an insurer. In Michigan, a professional P&C insurance agent who is familiar with the industry can help you simplify the purchasing process. Insurance agents can work as independent agents who represent a number of insurers or as captive agents who only work for one P&C insurance provider. Captive agents give comprehensive information about the numerous home insurance policy alternatives offered by the same company, whereas independent agents offer several insurance quotes from the firms they represent. In home insurance, you can make quarterly, monthly, or annual premium payments, depending on the insurance contract terms.

Homeowners insurance is not required by law in Michigan. However, once you meet the legal requirements and are qualified for home insurance in the state, you cannot be denied because of the age, location, or the kind of neighborhood where you reside. According to the Essential Insurance Act, the following persons may be considered ‘ineligible’ to buy home insurance in Michigan:

• Those who are convicted of arson, attempted arson, use of explosives, or property vandalism within the past five years before application
• Those denied home insurance claims in the last five years due to evidence of fraud, arson, or conspiracy to carry out arson
• People who own properties used for illegal activities
• Those owing taxes for two or more years on their residential properties
• Individuals who refuse to purchase the minimum coverage amount necessary for the home insurance policy type they choose
• Those with homes in deplorable physical condition

If you are not qualified for homeowners or renters insurance, contact your insurance agent to submit an application to the Michigan Basic Property Insurance Association (MBPIA). The state government established the MBPIA to offer residential insurance to those who cannot acquire coverage on the open market.

Michigan residents with active homeowners insurance policies should file insurance claims with their insurers in the event of damage due to a covered peril. Under Section 500.2006 of the Michigan Insurance Code, insurance providers must do the following things after receiving insurance claims from insureds:

• Inform insureds within 30 days of receiving claims what details are necessary to begin processing claims (proof of loss)
• Pay insurance claims within 60 days after receiving proof of loss. Insurance claims are overdue if insurance providers fail to pay up after 60 days. As such, the insurer is mandated by law to pay 12% interest as overdue charges

Michigan P&C insurance providers have consistently paid out over 1 billion dollars to settle home insurance claims in the last 10 years. Each residential property insurance policy will have clearly specified limits while individuals can choose lower or higher deductibles depending on their needs. This explains why no two property insurance policies are the same. Different insurance providers have different terms and conditions, as well as optional coverage categories, endorsements, and riders. Engaging an independent insurance agent will help you understand what is contained in your policy document.

What Are the Types of Residential Insurance in Michigan?

Michigan homes come in various sizes and designs, and all need home insurance coverage. This is why there are several types of property insurance coverage. Residential property insurance plans in Michigan are designed to protect all types of residences against a covered loss. Renters, homeowners, mobile homeowners, condominium owners, and farmhouse owners can buy home insurance coverage that suits their building types and needs. Generally, home insurance in Michigan can be divided into two major types:

• Property insurance
• Liability insurance

PROPERTY - Residential Insurance in Michigan

Property insurance protects different types of buildings, attached structures, and personal belongings against perils stated in the policy document. A peril is an event covered under your insurance policy which can result in financial loss. Examples of perils include vandalism, volcanic eruptions, burglary, fire, and winter storms. Some home insurance policies are named peril policies, while others are open peril policies. Named perils policies stipulate the precise dangers or hazards that are insured, while an open perils policy covers all dangers except the ones not included in the policy. Based on the type of property and ownership, the following are the common property insurance types in Michigan:

HOMEOWNERS Insurance

More than 2.8 million houses in Michigan are owner-occupied. Each homeowner can choose between any of the five types of homeowners insurance forms provided by Michigan insurers:

• HO-1 Insurance Policy (Basic Form): This policy compensates for losses or damage caused by 10 common covered perils. These include fire/smoke, explosion, vandalism, lightning, theft, hail, windstorm, riot (or civil disturbance), non-flood water damage, and collision with a vehicle or aircraft. If you purchase a basic form policy, you may not get any payment if your personal belongings are damaged by the covered peril as it only provides little coverage. Most Michigan insurers do not offer HO-1 policies
• HO-2 Insurance Policy (Broad Form): Compared to the HO-1 policy, this policy offers additional risk coverage. Other covered perils include flying items, electrical problems, household appliances, and snow/ice weight. The HO-2 insurance is a replacement cost policy, meaning that if your house is destroyed, your insurer will pay for the cost of reconstructing it. Both the insured's home and their personal belongings are covered
• HO-3 Insurance Policy (Special Form): Homeowners usually choose the special form coverage since it covers all risks unless expressly excluded in the coverage. It offers protection for additional living expenses, personal liability, and private possessions. Open-peril policy allows insureds to add or remove hazards as they see fit. Although floods and earthquakes are not covered by the special form policy, a homeowner can add them as an endorsement or purchase them as separate policies
• HO-5 Insurance Policy (Comprehensive Form): This policy form is like an HO-3 insurance policy but provides added protection and with a few differences. It offers the maximum degree of protection for your home and personal property and covers all risks unless specifically excluded in the policy
• HO-8 Insurance Policy (Modified Form): This form is for residents whose houses were constructed more than 40 years ago and who are not qualified for HO-3. Such buildings, their contents, and their liability are covered under HO-8 insurance. Nevertheless, only named risks typical to the area where the structure is located are included in the policy

CONDO Insurance

Condo insurance in Michigan, sometimes referred to as the HO-6 policy, is uniquely designed to meet the needs of condo owners. A condominium unit has an ownership structure which is different from a single-family home. The association of owners often buys insurance coverage (a master policy) for shared facilities, such as corridors, external walls, pools, parking lots, and elevators. On the other hand, owners of each condo unit can purchase condo insurance to protect the personal belongings in their units.

Condo insurance typically exists as a named-peril coverage similar to the HO-2 policy. Although it would cost more, some insurers often allow their clients to switch to all-peril policies. This insurance coverage can reimburse insureds for damaged personal property and 'loss of use' when a covered incident renders the condo temporarily uninhabitable. Condo units interior features, like walls and floors, are also covered by condominium insurance. Condo insurance in Michigan can also cover personal liability claims when someone is hurt within your condo unit.

MOBILE HOME Insurance

Mobile home insurance in Michigan is best suited for manufactured or mobile homes. Also known as the HO-7 insurance form, mobile home insurance offers personalized all-risk protection for just the physical building. However, only the specific risks mentioned in the policy, which may include hail, explosions, fire, theft, falling items, and vandalism, are covered for personal property. Owners of park models, modular houses, sectionals, and travel trailers in Michigan should consider getting mobile home insurance.

LANDLORD Insurance

Landlord insurance provides coverage for damages done to a rental property, other attached structures, and tools or equipment used in maintaining the rental building. Landlords in Michigan who purchase this insurance are also covered against personal liabilities and medical costs that may arise when tenants get injured on the property. If a building is uninhabitable due to damages from covered perils, a standard landlord insurance will cover lost wages from rental income. The following are the three major landlord insurance policies in Michigan.

• DP-1 Dwelling Policy (Basic Form): This dwelling policy form is an affordable option for older rental structures or properties that are not often occupied. Under this policy, landlords get insurance protection for only a few risks, including wildfires, lightning, and winds
• DP-2 Dwelling Policy (Broad Form): This policy form covers more peril than DP-1 policies, including falling debris, the weight of snow or ice, and water released from pipes
• DP-3 Dwelling Policy (Special Form): This dwelling policy offers comprehensive coverage for all hazards. A DP-3 is the most prevalent type of dwelling coverage offered by many insurance companies in Michigan. It is frequently offered as replacement value coverage

RENTERS Insurance

More than 1.1 million Michigan homes are tenants-occupied. Renters insurance protects your personal belongings if you reside in a rented property. In a renters policy, you decide how much property damage insurance is necessary based on the cost of replacing your personal possessions. Renters insurance covers various risks, including lightning, wind, hail, riot, civil unrest, vandalism, falling items, smoke, and damage from a car. Additionally, renters insurance offers personal liability protection, guarding you against financial loss due to third-party claims for accidents that happened at your rented home and for which you were held responsible. It can also pay you for additional living expenses for temporary shelter and feeding when your apartment becomes uninhabitable due to a covered loss.

Your renters insurance policy in Michigan covers more than the replacement costs for lost personal belongings. You can also get an extra 10% of the total coverage limit of your policy to cover other belongings outside of your home. For instance, if you purchase personal property coverage worth $5,000, you will instantly be given an extra $500 in coverage for any lost, damaged, or stolen items located somewhere else in the U.S. According to a report by the National Association of Insurance Commissioners (NAIC), the cost of renters insurance is between $15 and $30 monthly.

LIABILITY - Residential Insurance in Michigan

Residential liability insurance in Michigan is for homeowners, landlords, condo owners, and renters. It covers legal actions in which the insured is held liable for third parties' accidents on their residential property. Most comprehensive home insurance policies often include liability coverage. Some instances where liability insurance is necessary include a situation where your visitor gets injured while in your home. If the injured person needs medical treatment or decides to sue you, your liability insurance can pay for the medical costs or legal fees. Also, in situations where your pets damage someone’s belongings or injures someone, your homeowners coverage through liability insurance will cover it. However, liability insurance excludes costs of treating pets when they are injured; that is often covered under pet insurance. To find out what your homeowners insurance covers and does not, it is crucial to speak with a Michigan-licensed property and casualty insurance agent.

Homeowners Insurance vs. Condo Insurance: How Are They Different?

Homeowners insurance and condo insurance are identical in that they offer the owner coverage for personal belongings, personal liability, and coverage for the inside of the home. However, the distinction between the two home insurance products is how they address insuring a property's structure. Generally, homeowners insurance policies in Michigan will cover the interior and the exterior parts of a home against covered perils. On the other hand, condo insurance only covers the interior features of the owner’s individual unit. Other external features of a condo, which are shared between different owners, are covered under a separate condo association’s insurance. A condo association's master insurance can either be an "all-in" policy that covers your condo unit's fixtures, including carpets and fitted equipment, or a "bare walls-in" policy that excludes everything inside your unit.

How Much Home Insurance Coverage Do I Need?

Homes are usually an individual's biggest asset. Therefore, you should not hesitate to buy enough coverage to cover the expenses of rebuilding your house and replacing any damaged personal belongings. Being underinsured may compel you to use your savings or take out a loan to pay the remaining expenses in the case of a catastrophic loss. Having enough homeowners insurance coverage in Michigan is crucial for safeguarding your property against unanticipated occurrences (perils) and lowering your out-of-pocket costs in the event that you need to make a claim.

The first question you must answer to determine the appropriate homeowners insurance coverage in Michigan is: How much dwelling coverage do I need? Dwelling coverage is the most important since it protects the property’s physical structure. Before choosing the dwelling coverage for your home, it is essential to recognize the distinction between replacement cost, repair cost, and actual cash value. Michigan insurers often allow residents to choose whether their homeowners coverage is based on an actual cash value, repair costs, or replacement costs.

Replacement cost is the cost of replacing or rebuilding your house to its former condition using similar building components of the same quality. This coverage pays the complete cost of replacing your home up to your policy limit minus your deductible. Note that a typical homeowners insurance policy often fixes a limit on the replacement cost. You should review your policy with your insurance agent and increase the limit if the initial policy limit is less than the current home rebuilding costs. Repair costs only pay to repair damaged properties and restore it back to its previous condition.

Actual cash value is the property' replacement cost minus depreciation at the time of damage. This implies that before settling your claim, the insurance provider will deduct a certain sum for depreciation from the worth of damaged property. For instance, a house that is 10 years old may only be worth $150,000 in actual cash, which will be worth more to replace today. Keep in mind that numerous variables might cause changes in your home's value. Some of these factors include the age of your property, its present state, location, the market value of surrounding properties, the economy, and the current housing market.

It is always advisable to consider a residential coverage limit that pays up to 100% of the rebuilding or repair costs. The replacement cost should be evaluated based on the cost of constructing supplies and labor. In Michigan, a new home typically costs between $200,000 and $250,000, or $90 and $150 per sq. foot. However, costs differ greatly depending on location, and frequent fluctuations in labor and material costs may result in increased expenses. After selecting the dwelling coverage amount, the coverage for other attached building structures is fixed at 10% of the dwelling coverage. For example, if your dwelling coverage limit is set at $300,000, your policy would cover up to $30,000 in damage to attached structures on your property. Any attached structure on your house is eligible for other structures' coverage. This includes the deck, garage, and porch.

Content coverage protects your private belongings if they are damaged by a covered peril or stolen. It is usually between 50% and 70% of the dwelling coverage. This means that with a dwelling coverage of $300,000 in Michigan, your policy would pay up to $150,000 or $210,000 to cover your personal possessions. Some of the belongings you can include under content coverage are computers, furniture, appliances, clothing, home decorations, electronics, and jewelry. Another coverage to include in your home insurance plan is loss of use insurance or ALE (Additional Living Expenses) insurance. This will pay for acceptable housing, food, and storage costs while you are unable to dwell in your house due to destruction or damage by a covered incident. Additional living expenses coverage is often 20% of your dwelling coverage limit.

Personal liability insurance covers you and your family members from legal actions due to a bodily injury sustained by a third party on your property. Liability coverage may also cover incidents stemming from pets. You can choose a personal liability insurance limit between $300,000 and $500,000. When visitors get injured while in your house, you will need medical payment coverage to pay the medical expenses. Michigan P&C insurance providers allow insureds to choose between $1,000 and $5,000 for medical coverage.

Generally, It is best to buy homeowners insurance with the help of a knowledgeable insurance agent in Michigan. A local insurance agent can assess your home value, personal belongings, and location to determine how much home insurance coverage you need. With the help of an agent, you may realize you need more homeowners coverage plans to provide adequate coverage. In the event that you are faced with a high premium, an agent can help you cut back insurance costs by finding discounts such as a multi policy discount.

Can You Over Insure Your Residential Property?

Yes, it is possible to buy too much residential property insurance in Michigan. Residents who overinsure choose a dwelling coverage limit that is more than the replacement cost of the house. The main cause of overinsurance is the error in using the market value of a house to set the policy limit. Generally, a home's market value may increase or decrease based on factors such as the property’s age, size, location, and market’s demand and supply. On the contrary, the replacement value can only fluctuate based on construction materials and labor cost. This means a house can be valued at $250,000 but may cost $200,000 to replace. Residents who choose the market value as the coverage limit end up over-insuring and the home insurance company will only cover the cost of rebuilding the house. Excessive insurance often leads to high premium rates. To avoid paying too much to cover your home and personal belongings, discuss your needs with an experienced P&C insurance agent in Michigan. A professional agent will assess your property and help you get a homeowners insurance policy that can replace your home in the event of unforeseen circumstances.

Can You Under Insure a Residential Property?

Underinsurance can occur when buying residential property insurance in Michigan. If you under-insure a residential property, the claims payment you get from the insurance company will not be sufficient to rebuild your damaged house or replace your personal belongings. Just as it is in over-insurance, choosing a coverage limit based on the house market value can lead to being underinsured. And so, underinsurance will result in unplanned out-of-pocket payments to repair or replace houses damaged by named perils.

Understanding the details of your homeowners insurance is the best way to find out how much coverage your policy provides. You can do this by consulting a knowledgeable and licensed P&C insurance agent. Such an agent can help you get a licensed property appraiser who can assess your home value and replacement cost accurately. With this assessment, an experienced agent will be able to get a homeowners insurance policy that suits your needs.

Does Residential Property Insurance in Michigan Cover Solar Panels?

Most homeowners policies cover solar panels since they are regarded as a permanent component of your house. However, in some cases, you may need to purchase solar panel coverage as an extra rider or endorsement to the main policy. Individuals who include solar panel coverage in their home policy can submit claims to repair or replace Photovoltaic (PV) systems damaged by named perils such as wind, vandalism, fire, and lightning.

The Michigan Solar Energy industries Association grew from producing 465MW in 2021 to 927MW in 2022. The current solar production level in the state is enough to power more than 147,000 households. With more residents opting for solar energy, solar power generation in Michigan is projected to reach 2,290MW by 2027. Homeowners often choose to install PV systems in their homes since it increases their home value. On the other hand, renters and condo owners add solar installation to their home electricity to reduce electricity bills.

Generally, solar panels may be in the form of rooftop-mounted panels or ground-mounted panels, which will affect the type of coverage you get. Homeowners with rooftop-mounted PV systems may include coverage for solar panels as part of their dwelling coverage. Meanwhile, those with ground-mounted solar panels can include coverage under attached structures. Renters and condo owners who purchase portable solar systems may include solar panel coverage under personal belongings insurance.

Note that not all insurers provide coverage for solar panels. As such, inform your insurance agent and review your homeowners insurance policy to be sure that you are eligible for coverage. A licensed insurance agent can help modify your existing residential property insurance to include coverage for solar panels. Alternatively, they can help you find new homeowners insurance quotes if your current insurance company does not offer coverage for home-installed solar systems.

Do Solar Panels Affect House Insurance?

Solar panels installed in your home will affect your residential insurance costs. This is because the cost of PV systems and installation typically drive up the value of your home. In Michigan, homeowners spend between $5,000 and $10,000 to install a 3KW PV system. As a result, a home with solar panel installation will have more value than a similar structure without solar panels. Due to a higher replacement cost, insureds need to increase the dwelling coverage limit to sufficiently cover solar panels, hence higher premiums. You should consult a local P&C insurance agent in Michigan who can provide any homeowners insurance questions related to solar panel coverage.

How Much Does Home Insurance Go Up With Solar?

The percentage increase in the cost of home insurance in Michigan after including coverage for solar panels depends on the solar panel type, the number of solar panels installed, and house electricity needs. Generally, homeowners who want PV systems that cover 100% of their electricity needs often install more solar panels. The more solar panels you add, the higher your home insurance premiums. Also, the location where you mount the solar system may affect the home insurance cost..

Before incorporating solar panels in your homeowners insurance policy, speak with an experienced insurance agent to see how raising your policy's coverage limits would impact insurance prices. This is to ensure that, in the case of unforeseen situations, your policy's coverage level will be adequate to repair both your house and your photovoltaic systems. In Michigan, installing solar panels may increase the cost of homeowner's insurance, although the percentage of increase will mostly depend on the insurance company.

Does Home Insurance Cover Hail Damage to Solar Panels?

Solar panels installed on the roof are often prone to harsh weather like hail storms. Typically, most Michigan P&C insurers include coverage for hail damage to solar panels in home insurance policies. However, some insurers require that homeowners with several solar panels purchase it as a rider policy. You should speak with a P&C insurance agent to know if your existing property insurance policy covers hail damage to solar panels. A professional agent will help you determine if it is necessary to increase the dwelling coverage limit, buy a separate hail coverage, or look for other insurance providers offering coverage for home solar systems.

Does Residential Property Insurance Cover Leaks?

Residential property insurance in Michigan can pay for leaks caused by faulty plumbing if the water leak is unexpected and unintentional. Examples of such unexpected leaks may be when a washing machine supply hose suddenly breaks or a pipe bursts. In situations where the water leakage is caused by subpar management, your insurer may reject claims to repair the damage. Coverage for faulty and unexpected leaks is included in renters, landlord, and condo insurance policies.

Does Home Insurance Cover Water Damage?

Generally, homeowners insurance covers water damages that are sudden and unintentional, such as those caused by burst pipes. Other types of water damages included in your residential property insurance policy in Michigan includes:

• Ruptured pipes: This may involve a frozen pipe that breaks, but not if you fail to maintain a sufficient level of heating in the house
• Accidental leakage, such as plumbing leaks or appliance leaks from a damaged dishwasher or washing machine
• Water damage caused by a fire that was put out using water from sprinkler heads or fire department hoses
• Water damage resulting from a slow and persistent roof leak, including storm-induced destruction or a tree falling on your roof.
• Storm-related water damage from hail or torrential rain
• Ice dams: Ice that accumulates in your gutter and results in water damage can be covered by home insurance as long as the damage was unexpected and was not due to poor maintenance

Home insurance does not cover flooding including damage from a hurricane's tropical storm. You may need to purchase a separate flood insurance policy to protect you from all flood-related damages. If you are unsure of what type of water damage is included or excluded from your policy, speak with a Michigan-licensed P&C insurance agent to help you understand the policy document.

Does Home Insurance Cover Plumbing Leaks?

Michigan home insurance covers plumbing leaks caused by burst pipes provided that the damage was sudden and unexpected. This implies that if your basement floods unexpectedly as a result of a burst water system pipe, residential property insurance may cover the cost of replacing any damaged furnishings as well as flooring and wall repairs. While many plumbing problems are covered by home insurance, avoidable water damage, such as slow leaks or frozen pipes in an unheated house, is typically not covered. Additionally, home insurance may not cover the cost of removing or remediating mold if it develops as a result of avoidable water damage. You are expected to fix minor leaks immediately to avoid further property damage that can lead to out-of-pocket payments.

Does Home Insurance Cover Roof Leaks?

Most roof leaks damaged by covered perils are paid for by a Michigan home insurance policy. However, the initial source of the leakage will determine whether your property insurance carrier will pay for the leak repairs and any future damage to your possessions. Leaks caused by normal wear and tear or inadequate maintenance are not covered by home insurance, but most other situations are usually covered. The declaration page of your residential property insurance policy should specify which risks are included or excluded. You can speak with a knowledgeable insurance agent to help you understand the declaration page.

Does Home Insurance Cover Temporary Housing?

Most residential property insurance types in Michigan cover the cost of temporary housing if your home becomes uninhabitable and is being repaired. Coverage for temporary housing is sometimes regarded as additional living expenses (ALE), loss of use coverage, or coverage D. Depending on the homeowners insurance coverage you purchase, you can get compensation if you have to leave your house because of damage or would-be damage due to a covered peril. For instance, even if your house is yet to be destroyed or damaged but is in the line of a wildfire, you could be covered for evacuation.

Does Residential Property Insurance Cover Theft?

Home insurance policies often include coverage against all kinds of theft. If you have a standard residential insurance plan in Michigan, you can submit claims to repair or replace stolen personal properties or vandalized buildings. Home insurance coverage against theft is available for renters, homeowners, landlords, and condo owners. Most home insurance companies allow residents to include identity theft coverage as an endorsement or rider to their homeowners coverage. Furthermore, the contents coverage or coverage C extends to personal belongings with you while you are on vacation. This means that if your personal belongings are stolen when you are traveling, your insurance company will pay to replace such stolen items. Break-ins that occur on your property while you are not home are also covered under the personal property coverage. However, insurance companies may deny your claim if you have been away from your home for an extended period. As such, you should consult your insurance agent and discuss possible options for your home insurance if you will be away for a long time.

Does Residential Property Insurance Cover Mold?

Home insurance in Michigan often covers mold damages, with some exceptions. Mold forms when water seeps into your home. Your insurance company will pay for mold caused by malfunctioning appliances, toilet overflow, or burst pipes. What may not be included in residential property insurance is mold damage resulting from flood, homeowners' negligence, and persistent wear and tear.

Note that the cost of mold removal and restoration may not be fully covered by your insurance policy. The amount of mold coverage is often constrained; for instance, an insurance company may restrict mold removal and treatment to $10,000. If you live in a flood-prone area in Michigan, you may need to speak with a local P&C insurance agent to review your existing policy or get comprehensive mold coverage.

Does Home Insurance Cover Foundation?

Home insurance will only cover foundation damages caused by covered perils like explosions, volcanic eruptions, or sudden water damage. Michigan insurance companies do not compensate policyholders if the home foundation damage results from:

• Earthquakes
• Flooding
• Sinkholes
• Shifting earth surface
• Poorly-built foundation
• Regular wear and tear due to aging homes

Does Home Insurance Cover Natural Disasters?

While home insurance provides coverage against natural disasters like wildfires and volcanic eruptions, you may need a separate policy to financially protect yourself and secure your home against floods and earthquakes. Natural disasters in Michigan are unpredictable and can cause massive financial losses. Unfortunately, not many people realize the nature of these disasters and their effects until they have lost their homes and personal belongings to one. Understanding which disasters are most likely to occur in Michigan might help you select home insurance coverage that offers the protection you need.

Currently, there have been 43 declared disasters in Michigan, according to the Federal Emergency Management Agency (FEMA). The latest severe storm disaster occurred in June 2021, which destroyed several homes and led to over $150 million in housing assistance funds from FEMA. Wildfires are also common in Michigan and have led to destruction of houses and personal belongings. A report by the Michigan Department of Natural Resources (DNR) revealed that Michigan often experiences more than 10,000 wildfires every year. Fortunately, most home insurance policies cover losses caused by wildfires and winter storms. Residents are encouraged to purchase a separate flood insurance policy to cover damages caused by floods or other standalone policies for other major disasters like earthquakes.

FLOOD INSURANCE

Flood insurance is available for renters, homeowners, landlords, and condo owners in Michigan as a separate insurance policy. With a flood insurance policy, you can get coverage against water damages caused by flooding. Everyone in Michigan should get flood insurance. While some areas are regarded as high-risk zones, others are low-risk or moderate-risk. Generally, the nature of the area in which you live will determine the suitable flood insurance coverage for you. There are different types of FEMA Flood Maps that help individuals and their insurance agents to assess their flood risk.

According to the Federal Emergency Management Agency (FEMA), just an inch of floodwater can lead to damages worth $25,000. In Michigan, notable floods like the 1904 Grand River Flood, the 1975 Lansing Area Flood, and the 2013 Grand River Flood led to financial losses worth millions of dollars. You can prevent these losses by purchasing flood insurance from private home insurance companies in Michigan. Alternatively, flood insurance is available through FEMA’s National Flood Insurance Program (NFIP). Your best bet when buying flood insurance is to speak with a Michigan-licensed insurance agent who can help you assess your risk and get a homeowners insurance quote that suits your needs.

TORNADO INSURANCE

A comprehensive homeowners insurance policy covers damages caused by tornadoes, which means Michigan residents may not need a separate tornado insurance. While Michigan has witnessed harsh winters in the past, the number of catastrophic severe weather encountered in the state is not as high as in other regions in the U.S. According to expert reports, Michigan experienced 17 tornadoes in 2021 without any fatalities. Tornado damage occurs when flying debris and heavy materials hit the affected properties. Changes in pressure and devastating winds can also lead to tornado-related home destruction. With tornado coverage in your standard home insurance, you can avoid out-of-pocket payments to fix these damages. You may find out what should be covered and what should be excluded from your house insurance policy by reviewing your policy with a P&C insurance representative.

HURRICANE INSURANCE

There is no standalone hurricane insurance in Michigan. However, residents can protect their properties and personal belongings from hurricane-induced financial losses by getting home insurance and flood insurance. Although Michigan is not known for disastrous hurricanes, residents with a combination of home and flood insurance are financially secured against severe tropical storms crossing the state. You should discuss your needs with a local insurance agent who can help you determine the right homeowners insurance policies that will sufficiently cover any form of hurricane damage to your building and personal belongings.

EARTHQUAKE INSURANCE

Earthquake insurance provides financial coverage for your building, other attached structures, and personal belongings when earthquakes damage them. A standard home insurance policy in Michigan does not cover earthquake damages. However, individuals with a comprehensive home insurance form can get compensation when their homes or belongings are affected by earthquake-induced fires. In Michigan, there are no records of devastating earthquakes due to inactive seismic activities. Low-magnitude tremors recorded in Michigan are often aftershocks felt from earthquakes that occur in surrounding states. These tremors may affect building walls and damage some breakables inside the house. As such, Michigan residents may need to add earthquake coverage as an endorsement to their standard home insurance policy. An earthquake endorsement is available for renters, landlords, condo owners, and farmhouse owners. Note that including earthquake endorsement will affect the cost of your residential property insurance. To avoid overinsurance or underinsurance for earthquake coverage, speak with a licensed agent in Michigan to help you assess your earthquake risk.

SINKHOLE INSURANCE

Sinkhole insurance in Michigan covers sinkhole damages to your house, any structures on your property, and the personal property in them. Most residential property insurance policies do not cover sinkhole damages or other damages caused by earth movement. This means that your home insurance provider will not pay you when sinkholes destroy your insured home. However, some insurance companies offer sinkhole coverage options as a rider or endorsement to a standard homeowners insurance policy.

Sinkholes are big depressions in the ground's surface brought on by the abrupt crumbling of the top layer of soil. They can have disastrous consequences if it forms close to properties. In Michigan, sinkhole formations are often found in Alpena and Presque Isle Counties. You can avoid out-of-pocket payments for repairing or replacing homes and belongings damaged by sinkholes by including sinkhole endorsements to your property insurance. It is advisable to seek the help of a Michigan-licensed P&C insurance agent who understands sinkhole risk unique to your location. With the help of such a knowledgeable agent, getting adequate coverage against sinkhole damages will be easier.