Finding the Right Policy to Cover Your Michigan Home

Though there are many commonalities between the states regarding insurance law, every area has its own unique homeowners insurance laws. Michigan law requires that virtually any home be insurable. Additionally, state law allows providers to compete fairly freely, which means that there are over 100 companies offering policies in Michigan.

So, look for the best rates from the companies that offer the level of protection you feel the most comfortable with. There are plenty of reasons you would want to obtain a certain amount of protection that ensures you are looked after in the event disaster strikes. Most homeowners consider their houses one of their most significant investments, so it is a good idea to ensure you are protecting it with far more than the minimum legal requirements. You should use the minimums as a starting point when it comes to calculating how much coverage you need in your specific situation. Make sure you could afford to replace your home and maintain your standard of living if anything were to happen.

Make Sure You Know the Laws on the Books

In the Wolverine State, there are countless options when it comes to protecting your investment. If you currently have a mortgage, there will be specific standard put in place by your bank or financial institution to ensure their investment is protected in the event disaster strikes. Make sure you are aware of what these standards are so you can remain in compliance at all times.

The majority of residential plans fall into two specific categories: Actual Cash Value and Replacement Cost protection.

Actual Cash Value Takes Many Things into Consideration

This type of coverage considers the depreciation that occurs and subtracts it from the reimbursement, along with the estimated remaining life. An example of this would be a home theatre system that is destroyed in a fire. If you purchased it 5 years ago for $2,500 and your insurer determines a comparable model would cost $3,000 today and last for 10 years, the ACV would be $3,000 (how much it would take to buy a new one) multiplied by 50% (the estimated remaining lifespan of your previous one) to get $1500. This (minus any deductible and fees) is what you would receive.

Replacement Cost Coverage

This is typically more expensive than the aforementioned option, but will usually give you much more of a reimbursement if you have to file a claim. Instead of factoring in depreciation and a useful lifespan, this will simply replace what is damaged, offering you more peace of mind throughout the claims process. We recommend you consider this valuable type of coverage so you won't have to deal with the added costs of purchasing new items.

Endorsements Make Your Life Easier

Endorsements are basically add-ons that offer extra protection in the event you have to file a claim. Here are a few to consider:

• Personal Property

  Although most plans will replace personal property up to a certain level, this endorsement will offer more protection for those who own high-value items or operate a home business such as a daycare. We highly recommend you consider purchasing this type of add-on.

• Additional Living Expense

  If your dwelling was destroyed in a disaster, this will ensure you could maintain a normal quality of life throughout the claims and rebuilding process.

• Flooding

  If your area is susceptible to flooding (most are), this is an essential coverage you need to consider. Don't wait until it is too late to add this to your plan.

• Renters

  If you are currently renting, don't make the mistake of thinking your landlord's insurance plan will take care of you in the event something goes wrong - chances are it won't. Make sure you have a solid policy lined up before signing the rental agreement.

• Condo

  As with any other type of dwelling coverage, this will look after your place of residence.

• Mobile Homes

  Those who regularly live in mobile homes will find this type of plan invaluable when it comes to replacing personal property that is destroyed. Don't be left without this essential component of a solid safety net.

It doesn't matter what the state minimum coverage standards are, you need to invest in an option that gives you more peace of mind in the event something bad happens. Don't wait until it is too late to protect your dwelling with a well-funded plan that will look after you and your assets. For more information, you can check out the official Michigan Interactive Home Buyers' Guide so you can make an informed decision on a plan. Additionally, you can contact us at your convenience if you have questions or comments.