Michigan Basic Insurance is a Fair Plan Policy
Michigan Basic Insurance will provide fair access to property insurance at standard rates regardless of property location. This insurance company is part of the FAIR Plans (Fair Access to Insurance Requirements). Created on October 29,1968, the FAIR Plans are a result of the Federal Omnibus Housing Bill, passed on August 1, 1968, 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 where you live. However, you may be ineligible and denied coverage for these reasons:
- Taxes on your property are over two years past due.
- Within the past five years, you were guilty of a crime of arson or destroying property.
- The property you want to insure has illegal or dangerous purposes.
- If your home has a physical condition which presents a likelihood of a loss (such as a bad roof)
- Within the past five 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 three years, there is a liability claim in which the insured was negligent. If you have three property claims of any type totaling over $4000 ($3000 if they are non-weather related). The insured fails to correct a dangerous condition after being notified by the company.
Michigan Basic Insurance provides basic homeowners insurance
Michigan Basic provides property insurance to qualified individuals who can’t get Michigan homeowners insurance with another company. If you qualify, you can get a standard HO-2 or HO-3 policy from Michigan Basic. These policies are the same policies regular insurance company offers.
To qualify for homeowners insurance with Michigan Basic Insurance
You need to own or rent and live in a qualified property
- “Qualified Property” means a residential property that meets building code standards that do not have farm or business use and has no illegal activities.
To determine if your property is “qualified,” MBPIA will have your property inspected (at no cost to you). If MBPIA decides that your property does not qualify, they will give you a written explanation of why the property does not qualify and what to do to make it eligible. All Michigan Basic Policies are issued for one year, which can be renewed on a qualified property for the next two years without another inspection, which Michigan Basic schedules at their discretion. Michigan Basic can issue a temporary binder for up to 60 days to insure your property while you are waiting for 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, they will replace the damaged walls with plaster walls. 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. If you have plaster walls, the walls will be replaced with drywall. To buy this type of policy, you must purchase 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 homeowner’s insurance policy read article Understanding Michigan Homeowners insurance.
Steps to Getting a Michigan Basic Policy:
- Contact a Michigan Basic agent. Michigan Basic policies have to be purchased from a licensed Michigan agent. You can call a Michigan Basic agent at 248-888-1134.
- Click the link to fill out your information for a Michigan Basic Quote.
- Michigan Basic policies require 25% down payment, and coverage will begin the next day.
- After payment is made, a representative will contact you within seven days to schedule an interior and exterior inspection.