Your Guide to Homeowners Insurance – For Michigan Consumers Page 6
Insurance Eligibility
Michigan law defines an “eligible person” for homeowners
insurance as a person who is the owner living in, or a tenant of,
one of the following types of dwellings: a house, condominium
unit, cooperative unit, room, apartment, or a multiple unit
dwelling of not more than four residential units.
However, you may still be considered “ineligible” and can be
turned down for insurance if:
Within the past 5 years you have been found guilty of
arson or of an attempt to commit arson, the use of
explosives, or destroying property.
Within the past 5 years you have been denied payment
by an insurer of a claim under a home insurance policy
based on evidence of arson, fraud, or conspiracy to
commit arson or fraud.
The property you want to insure is used for illegal or dangerous purposes.
Taxes on the property you want to insure are 2 or more years past due.
You refuse to buy the minimum amount of coverage required for the type of policy you want.
Your home has a physical condition which presents an extreme likelihood of a significant loss
under a home insurance policy.
Within the past 2 years your home insurance has been canceled because of non-payment of
premium, unless you pay the entire premium in full before the issuance or renewal of the policy.
A company requires you to be a member of a group, club, or organization and you choose not
to join or maintain membership.
If the value of the property you want to insure does not meet the minimum requirements for the
type of policy you want to buy.
If you find that you are ineligible for home or renters insurance, you may want to ask your agent to apply
to the Michigan Basic Property Insurance Association (MBPIA). The MBPIA was created by the state
legislature to provide property insurance to persons who cannot find insurance in the regular market.
Any licensed agent can help you obtain insurance through the MBPIA.
Do I Have to Carry Insurance on a Home?
Unlike some other insurance coverages, you are not required by law to purchase homeowners
insurance. However, if you are financing your home, your lender will require you to purchase insurance
to protect its financial interest. Lenders will buy an insurance policy to cover your home if you don’t
maintain insurance coverage in accordance with the terms of your loan agreement. The loan
documents you sign may require you to maintain coverage. If coverage is required but not maintained,
the lender will place coverage on the property called force-placed insurance, to protect their interest
in the property and charge you for this coverage.
The loan documents will spell out specifically what must be covered and how proof of coverage is to be
submitted to the lender or the company servicing the loan. If your home is not being financed, you may
If you are eligible under
the law you cannot be
denied insurance solely
because of the age of
your house, its location,
or the type of
neighborhood you live
in.