Homeowners policies in Michigan can cover various types of structures. Below you will see the different coverage’s forms available to Michigan residents. Insurance coverage for your personal dwelling.

Section I Property

Section II Liability

Coverage forms:

HO-2 Broad Form

A named perils policy insuring the dwelling, detached structures and personal property (A, B and C). The list of named perils includes:

• Fire or lightening
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Aircraft
• Vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Falling objects
• Weight of ice, snow or sleet
• Accidental discharge or overflow of water or steam
• Sudden and accidental tearing apart, cracking, burning, or bulging ######
• Freezing of plumbing, heating, air conditioning, or automatic fire sprinkler system
• Sudden and accidental damage from artificially generated electrical current
• Volcanic eruption

Also covers additional living expenses or fair rental value.

HO-3 Special Form

Most popular of the three homeowner packages. Dwelling and other structures are covered all under direct and indirect losses except for specifically excluded losses (open perils or all-risk on A and B). Broad form coverage on C. This policy will also include personal liability coverage. Insurers will pay on full replacement cost with no depreciation.

 

 

HO-4 Contents Broad Form

“Renters Policy” Meets the needs of tenants and other dwelling occupants that do not require dwelling coverage, Contents- named perils. This provides coverage for people who are renting homes, apartments or rooms. Personal property covered for the same named losses listed under HO-2 (broad form). The insured will have coverage for personal property as well as liability. No coverage for A or B.

HO-5 Comprehensive Form

Personal property is written on an open-perils basis on coverages A, B and C. Covered unless specifically excluded.

HO-6 Unit Owners Form

“Condo Owners” Meets the needs of owners of condominium units and cooperative apartment shares. This form is designed for condominium owners and coop apartments. This will provide coverage for the unit owners for the same named perils of the HO-3. Coverage A studs in, permanent fixtures. Loss assessment up to $1000.

HO-8 Modified Coverage Form

Will cover loss of a dwelling and other structures at repair cost, or the amount required to repair or replace damaged property using similar materials. Replacement cost will not apply.

Covered perils include:

• Fire or lightening
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Aircraft
• Vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption

 

Along with coverage for the structure, you will be required to have liability coverage as well. Understand that the liability coverage’s may be different limits depending on personal preference.

 

 

Definitions:

SECTION 1: Property coverage

Coverage A – Dwelling

Property coverage for the dwelling building. This will include everything physically attached to the dwelling including garages and decks. Also built in appliances, plumbing, electrical, heating and central air conditioning. Covers materials and supplies on the resident premises that are used to construct, alter or repair the premises.

Coverage B – Other structures

Provides replacement cost for all detached buildings on the property, including detached garages, pools, gazebos, fencing and sheds. 10% of A

Voided coverage ~ structures rented to non-tenants unless it is a garage. Aso, building used for business or farming.

Coverage C – Personal Property

Provides coverage for all personal contents anywhere in the world. If you take the dwelling and dump it upside down like a dollhouse, everything that falls to the ground in considered personal property. Coverage is written on a named perils basis. 50% of A (unscheduled)

Not covered ~

Articles separately described and insured on this or other policies

Animals, birds, and fish

Motor vehicles

Aircraft

Hovercraft

Property of roomers and boarders

Property rented

Business data

Water or steam

 

Coverage D – Loss of use

This coverage is put in force when the insured cannot occupy their dwelling because of a loss from a covered peril. This will cover expenses incurred. 30% of A

Covers the necessary increased expense incurred while occupying temporary quarters following a loss when residence is uninhabitable

Pays fair rental value

Not limited by the policy expiration

Does not cover loss of use due to Ordinance or Law

 

Additional coverages

Coverage for the increased expenses for a family to maintain their standard of living.

Debris removal

Reasonable expenses paid, if damage from covered peril

Included in liability limit (Cov A)

If removal expenses and damage exceeds Coverage A policy limit, additional 5% increase in liability limit is available

The limit to remove a tree is $1,000

Reasonable repairs

Fire department service charge

$500 per service call

Property removed

Included in limit of liability

All Risk

Covered for any cause of direct loss for 30 days

Loss Assessment

$1,000

Ordinance or law

10% of Coverage A for rezoning or building ordinances

 

Trees, Shrubs, and other plants

$500 for any one tree

5% of the coverage A limit

 

Credit card, forgery, and counterfeit money

$500 maximum coverage

No deductible applies

Additional coverage for
Losses due to acceptance of counterfeit money

Check forgery

Theft or unauthorized credit or debit card use

 

$2,500 limit for Landlord’s Furnishings

No theft

$5,000 limit for grave markers

Damage to grave markers and mausoleums caused by a peril covered under Coverage C

 

 

Section 2: Liability

-Coverage E: Personal liability- applies to third party coverage for those who are injured or whose property is damaged by the insured

-Coverage f: Medical payments to others- covers the necessary medical expenses incurred by others

Although a homeowners policy will cover numerous perils and other risks, included will be exclusions, or circumstances in which insurance coverage can not be extended.

 

Perils Insured Against

The perils that the insured is willing to absorb the risk. Only listed perils will be covered.

Exclusions

What the insurance company will not cover. These exclusions can be certain perils, activities, property and losses.

Section I: Standard Exclusions

Earth movement

Earthquakes, volcanic land shock waves, landslide, mudflow, sinkholes, and mine subsidence

Water damage—water source is from outside

Floods

Backup of sewer or drain

Power failure

Occurring off premises

Neglect

Must protect your property

War

Nuclear Hazard

Intentional Acts

Governmental Actions

Concurrent Causation

One covered peril-one excluded peril

Ordinance or Law

We’ll talk about this under additional coverages

 

Homeowners Exclusions

-Collapse

-Freezing of plumbing, heating, air conditioning, or household appliance

-Freezing, thawing, pressure, or weight of water or ice

-Theft of construction material

-Vandalism and malicious mischief to a vacant home

-Mold, fungus, or wet rot

-Natural deterioration

-Smoke from agricultural smudging or industrial operation

-Pollutants

-Settling of the dwelling

-Animals (owned, or damage caused by animals kept

-Natural deterioration

-Smoke from agricultural smudging or industrial operation

-Pollutants

-Settling of the dwelling

-Animals (owned, or damage caused by animals kept)

-War

-Nuclear hazard

-Intentional loss

-Governmental action

There are numerous conditions for each homeowners policy. Below each condition is listed with an explanation or example.

 

Exclusions that apply only to the Special form

Special form covers the most perils

Special form has the most exclusions

Freezing of Plumbing

Freezing, Thawing, Weight of Water or Ice – to outdoor property

Theft to a Dwelling under Construction

Vandalism to a Vacant Dwelling after 60 days

Mold, fungus or wet rot

Wear and Tear

Mechanical Breakdown

Smog, Rust, Corrosion or Dry Rot

Smoke from Agricultural Smudging

Discharge of Pollutants

Settling, Shrinking, Bulging or Expansion

Birds, Vermin, Rodents or Insects

Animals kept by the Insured

 

Conditions

The portion of the policy spelling out the obligations of the insured in order for the insured to be held liable for a covered peril.

Loss settlement

ACV paid for personal property

Awnings, carpet, appliances, antennae, grave markers, and structures that are not buildings like grave markers

Coverages A and B replacement cost provision

80% insurance to value to get RC

 

Insurable interest and limit of liability

• Limits claim collection to amount on declaration page

• Limits claim to insured’s insurable interest

 

Deductible

• Applies on a per loss basis

• If two or more deductibles apply, the highest one will be used.

• Minimum deductible is $500

Selected Endorsements

A provision added to a policy, sometimes at an additional premium. The endorsement ill add coverage that alters an exclusion, expands policy coverage, or modify the declarations page.

Earthquake

Excluded under homeowners forms

Can be added with the earthquake endorsement

5% deductible

Earthquake coverages

Earthquakes, landslides, volcanic eruptions, and earth movements that occur within a 72 hour period (residential properties)

Personal property replacement cost

Changes settlement on personal property under Coverage C from ACV to R/C, with a few exceptions

Scheduled personal property

Obtain broader coverage on certain types of personal property

Could be called:

Personal Property Endorsement

Personal Property Floater

Personal Inland Marine

 

Scheduled Personal Property Endorsement

Open perils, agreed upon and stated value, no deductible

 

General Eligibility Requirements

Must be Owner Occupied

Can be a duplex

Can be under construction

Can be purchased on a land contract

 

Must be primarily for residential purposes

 

Can have up to 2 roomers

 

Can have up to 4 units

 

Named insured

Person named on the declaration page and a resident spouse

Unnamed spouse moves out – spouse no coverage after 90 days

 

 

Residence Premises

Up to 4 units as long as the owner resides in at least 1 unit

Shown on the declaration page

Includes any of the grounds and other structures at the location

 

Definition Business

Trade, Profession, Occupation

Full or part-time

Day-care for relatives is OK

Volunteer Activity is OK

 

 

Peril Coverage

Special ~ Everything is covered unless it is excluded

And the burden of proof is with the insurer

Burden of proof on:

Named Peril – is with the insured

Open Peril – is with the insurer

 

 

All Homeowners Policies include THEFT

 

Homeowner Policy Conditions – Loss Conditions

Notify the insurance company – PROMPTLY

Notify the police

Notify the credit card company

Protect the property from further damage

Cooperate in the investigation of the claim

Prepare an inventory of damaged property

Show damaged property and records

If REQUESTED complete a PROOF OF LOSS within 60 days

Sign a sworn proof of loss

Loss settlement

Deductible is subtracted once total is computed

Coverage c- less of acv or the cost to replace with like kind

Dwelling: if limit of insurance is over 80% OF RECONSTRUCTION COST, THEN IT IS PAID UP TO THE LIMIT OF INSURANCE. : if limit of insurance is UNDER 80% OF RECONSTRUCTION COST, THEN THE GREATER OF ACV, OR THE PROPORTION OF INSURANCE TO THE 80% THRESHOLD TIMES THE LOSS.

 

Appraisal

Determines VALUE

20 days to find an appraiser

15 days to find an umpire

The decision of 2 is binding

THE insured AND INSURER BOTH Buy AN APPRAISER, ANY DIFFERENCES Are SETTLED BY AN UMPIRE.

 

Property Claims Settlement

Pair and set clause—one of the following:

Repair or replace back to full value of set

Insurer will pay the difference between the value before and after the loss

THE CLAIM WILL BE PAID TO THE INCREASED VALUE OF THE PAIR.

 

Other insurance or service agreement

• IF MORE THAN ONE POLICY APPLIES, THE LOSSES WILL BE SPLIT PROPORTIONALLY.

Our option

• INSURERS USUALLY SETTLE CLAIMS BY SENDING A CHECK AND THE INSURED SECURES THE REPAIR OR REPLACEMENT

• THE INSURER MAY CHOOSE TO SECURE THE REPAIR OR REPLACEMENT

Loss payment

• THE INSURER WILL ADJUST ALL LOSSES WITH THE INSURED OR THE INSURED’S REPRESENTATIVE

Abandonment of property

• IF THE INSURED ABANDONS PROPERTY AFTER IT IS DAMAGED, THE INSURER NEED Not TAKE RESPONSIBILITY FOR IT.

Mortgage clause

• CHECKS FOR COVERAGES A AND B ARE MADE OUT TO BOTH PARTIES

• IF AN INSURED IS DENIED PAYMENT, THE MORTGAGEE CAN STILL COLLECT ITS INTEREST.

No benefit to bailee

· IF A BAILEE HAS POSSESSION OF PROPERTY, THEY ARE RESPONSIBLE FOR IT

Loss payable clause

• THE LESSEE MAY BE NAMED IN THE DECLARATIONS AND INCLUDED ON CHECKS TO DAMAGED PROPERTY.

 

Section II Liability

Exactly the same coverage for every Homeowner Form!!!