Michigan Basic Insurance

Michigan Basic Insurance is a Fair Plan

Michigan Basic Insurance will provide fair access to property insurance at standard rates regardless of property location.  Michigan Basic is part of the FAIR Plans (Fair Access to Insurance Requirements). These plans were established on October 29,1968,  The FAIR Plans were a result of the Federal Omnibus Housing Bill, passed on August 1, 1968 established to make property insurance more readily available to people who can’t obtain it from private insurance companies.

Michigan Basic Insurance provides insurance when you can’t get Michigan homeowners insurance

In Michigan under the essential insurance act you cannot be denied insurance coverage solely because of the age of your house, its location or the type of neighborhood you live in. However you can be considered ineligible and denied coverage for these reasons:

  • Taxes on your property are over 2 years past due.
  • Within the past 5 years, you have been found guilty of a crime of arson, the use of explosives or destroying property.
  • The property you want to insure is used for illegal or dangerous purposes.
  • If your home has a physical condition which presents an extreme likelihood of a significant loss (such as a bad roof)
  • Within the past 5 years you have been denied a claim based on fraud or arson.
  • You don’t want to buy the minimum coverage required for the type of policy that you want to buy.

Companies can also refuse to write new policies based on the physical condition of your property, adjacent hazards and property vacancies. Companies may not renew policies if during the past 3 years there is a liability claim in which the insured was negligent, 3 property claims of any type totaling over $4000 ($3000 if they are non weather related) or if the insured fails to correct a dangerous condition after being notified by the company.

Michigan Basic Property insurance association logo

Michigan Basic Insurance provides basic homeowners insurance

If you are unable to get Michigan homeowners insurance through the regular market, call 248-888-1134 or click here to be connected to a local Michigan Basic insurance 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 Michigan homeowners  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 offered by a regular company.

To qualify for homeowners insurance with Michigan Basic Insurance

You need to own or rent and live in a 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 Michigan Basic 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 Michigan Basic discretion.  If work is required Michigan Basic 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 insurance offers two types of Michigan homeowners insurance 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.

To understand all the coverages on a Michigan homeowners insurance policy read article Understanding Michigan Homeowers insurance.

Michigan Basic insurance policies have to be sold through a Michigan Basic insurance agent if you have been denied coverage through a regular carrier then you can contact a Michigan Basic agent @ 248-888-1134 to see if you will be eligible for a Michigan Basic homeowners policy.