MSU Extension MI Money Health

Home insurance in Michigan is regulated by state law. However, insurance companies compete with one another for customers. You as the consumer have the opportunity to shop and compare several companies and rate their levels of coverage and service. By taking the time to do so you will discover what insurance plan will protect your family at a cost you can afford. Therefore, it pays for us all to do fact checking and a little shopping around.

According to the Michigan Department of Insurance and Financial Services (DIFS), state law sets forth factors companies may use when setting their rates. There are some differences in the number of factors used to determine individual homeowner policies and group policies (like a policy offered to a group of condominiums, for example). There are usually more factors for individual policies. Some of the factors include: the type of house, brick or wood, the age and physical condition of the home, as well as, safety devices and security (alarms, detectors and distance from fire hydrant). Therefore, it is important to make sure that your insurance company is using correct information and is aware of any significant changes, such as adding a security system or the building of a new fire station. Some simple attention to detail can save you money.

Other details can affect your rates. For example, if the company that you have chosen has a large number of claims filed in a year, following a bad storm, tornado, or heavy snow, the company may have paid out much more than they anticipated when doing their planning and this can affect your premiums. Your credit score can affect your rates as well. If you suspect an inaccuracy in the factors that have been used, you can ask the DFIS to investigate the matter and review the rate you are paying.

As stated earlier, consumers can collectively put pressure on insurance companies by shopping for the best rates. In Michigan, if you are eligible for home insurance coverage, you cannot be turned down for coverage. Why is this important? Some people believe that they have to employ an agency located close to where they live. This is not true. Any agent or company in the state with proper licensing can offer you coverage and many companies offer a wide variety of rates in every area of the state. You may find that the best rate and service for your needs is offered by a company that you have never heard of and is across the state.

You can start shopping home insurance by:

• Making an inquiry on the regulated insurance entity search page of the DIFS.
• You can also search for agencies or agents by name or location at the site.
• Looking through your local phone book advertisements.

Inside the DIFS “Your Guide to Homeowners Insurance,” use the handy comparison chart on pages 17 to 19 when you have several quotes from agencies.  If you want to save money on home insurance this year, check your policy for accuracy, ask questions, and shop around. You just may find a better deal.

Making financial changes can take time and be difficult, but results can be rewarding. Check out the DIFS website for more valuable insurance information and if you have other questions, or would like to ask an expert, Michigan State University Extension has access to many resources. Visit the MI Money Health page for contact information and answers to your questions in regard to money management and homeownership.