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Consumer Counselor Information for Michigan Consumers

The Michigan Basic Insurance Association

The Michigan Basic Property Insurance MBPIA Replacement Cost Policies Association (MBPIA) was created to provide A replacement cost policy is what most people property insurance to qualified persons who mean by “homeowners insurance.” These are cannot get insurance in the regular . If available through the MBPIA. This policy you are qualified, you can get insurance allows you to replace, repair or rebuild your through the MBPIA for homeowners, renters, damaged property to its original condition, with condo-owners, dwelling fire, or commercial the same kind and quality of materials. In order property. Homeowners coverage is the most to buy this type of policy from the MBPIA, you prevalent form of personal property coverage must buy an amount of insurance equal to 80% provided by the MBPIA to Michigan of what it would cost to replace your property. consumers. Its policy forms are equivalent to HO-2 and HO-3 forms used by authorized MBPIA Repair Cost Policies insurance companies. The MBPIA also offers a repair cost policy. This type of policy allows you to replace, repair or Qualifications rebuild your damaged property to a condition Homeowners insurance is available from the similar to what it was before the damage, using MBPIA to any qualified person on any qualified modern materials. In order to buy this type of property. policy from the MBPIA, you must buy an 1. You qualify for insurance through the amount of insurance equal to what your MBPIA if you own or rent and live in property is currently worth. In general, this type “qualified property.” of policy provides less coverage for about the same cost as a replacement cost policy. 2. “Qualified Property” means residential property which meets building code The Insurance Counselor entitled “Homeowners standards, is not used for farm or business Insurance: Replacement vs Repair Cost” reasons, and is not used for illegal explains the difference between replacement activities. cost and repair cost policies.

In order to determine if your property is Additional Coverage Available “qualified,” the MBPIA may want to have your The MBPIA also offers its policyholders the property inspected (without cost to you). If the opportunity to purchase additional property MBPIA decides that your property is not insurance coverage for specific types of water qualified, you are entitled to a WRITTEN damage. explanation of why the property does not qualify and what you can do to make the property This additional coverage offers policyholders qualify. the ability to purchase coverage up to $5,000 for water damage caused by rain, ice, snow or MBPIA Policies sleet. Policyholders should be aware, however, The MBPIA issues one-year policies, which can that this coverage MAY STILL EXCLUDE be renewed on qualified property. COVERAGE FOR PROPERTY LOSSES RESULTING FROM , SEWER OR

[FIS-PUB 0209] Michigan Department of Insurance and | 877-999-6442 | www.Michigan.gov/DIFS [4/20]

DRAIN BACK-UP OR OVERFLOW, OR Governors of the MBPIA to review the decision. GROUND WATER SEEPAGE. Policyholders If you are still not happy with the Board’s that are interested in obtaining more details decision, you can ask the Department of about this additional coverage and its cost Insurance and Financial Services (DIFS) for a should contact their insurance agent. further review.

REMEMBER, if you are eligible for home Rates insurance, BE SURE TO SHOP AROUND FOR The rates charged by the MBPIA for THE BEST COMBINATION OF PRICE, homeowners, renters, condo-owners, dwelling COVERAGE AND SERVICE. If you are unable fire, or policy forms are to get insurance through the regular market, based on MBPIA expenses and losses for the ask your agent to apply for you to the MBPIA. particular type of policy form. What to Do if You Have a Question or Problem If you already have insurance in the regular If you have an insurance question or problem, market and your insurance company cancels or call your insurance agent or company. If they refuses to renew your insurance (except in cannot help you, contact DIFS at the address or cases of fraud, non-payment of premium or telephone number on the bottom of this sheet. evidence of arson), your company should DIFS is the state department that regulates provide notice of cancellation or nonrenewal at insurance in Michigan. least 30 days before your coverage stops to

give you time to obtain insurance from another About DIFS company or from the MBPIA. Your company The mission of the Michigan Department of must also explain in writing how to apply to the Insurance and Financial Services is to ensure MBPIA. access to safe and secure insurance and

financial services fundamental for the Once you have insurance from the MBPIA, you opportunity, and success of Michigan can only be cancelled for: residents, while fostering economic growth and 1. non-payment of premium; sustainability in both industries. In addition, the 2. any reasons which would have made you or Department provides consumer protection, your property unqualified at the time you outreach, and financial literacy and applied, had it been known. services to Michigan citizens. For more information please contact DIFS at 877-999- If you are cancelled by the MBPIA, you will be 6442 or visit www.michigan.gov/DIFS told IN WRITING that you can ask the Board of

[FIS-PUB 0209] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [4/20]