What to do if you can’t get Michigan Homeowners Insurance

Most insurers will not insure vacant homes.

In Michigan under the essential insurance act you cannot be denied insurance coverage solely because of the age of your house, it’s location or the type of neighborhood you live in

If you are unable to get homeowners insurance through the regular market, you can ask a local agent  to apply to the Michigan Basic Property Insurance Association(MBPIA).  Michigan Basic was created to provide property insurance to qualified individuals who can’t get insurance with another company. If you are qualified, you can get a standard HO-2 or HO-3 policy from Michigan Basic which is the same policy as a regular company.

To qualify with MBPIA

You need to own or rent and live in “qualified property” “Qualified Property” means residential property which meets building code standards, is not used for farm or business reasons. and is not used for illegal activities.

 In order to determine if your property is “qualified”, MBPIA will have your property inspected (at no cost to you). If MBPIA decides that your property is not qualified, you are entitled to a written explanation of why the property does not qualify and what you need to do to make it eligible.

All MBPIA Policies are issued for 1 year, which can be renewed on a qualified property for the next two years without another inspection, which could be scheduled at MBPIA’s discretion.  If work is required MBPIA can issue a temporary binder for up to 60 days that will insure your property while you are waiting for an inspection or making the repairs to qualify your property.

Michigan Basic offers two types of homeowners policies:

Replacement Cost Policy- This policy will allow you to replace, repair or rebuild your damaged property to its original condition, with the same kind and quality materials. That means if you have plaster walls it will be replace with plaster walls.  In order to purchase this type of policy you must insure your home for an amount of insurance equal to or greater than 80% of what it would cost to replace your property. Repair Cost Policy-This type of policy allows you to replace, repair or rebuild your damaged property to a condition similar to what it was before the damage, using modern materials. This means that if you have plaster walls the walls will be replaced with drywall.  In order to buy this type of policy, you must buy an amount of insurance equal to the market value. In general this type of policy provides less coverage than a Replacement cost policy.

MBPIA will insure vacant homes, but they will put a vandalism or malicious mischief exclusion on your property. In other words if your home is vandalized while vacant it will not be covered.