Michigan Fair Plan Insurance Alternative?

The Michigan Basic Property Insurance Association (MBPIA) or the Michigan FAIR Plan was formed in 1968 to provide Michigan’s homeowners access to property insurance at regardless of the property location even if it is a high risk area for claims. All new business applications are submitted and serviced through a licensed property and casualty insurance agent.

Although basic coverage is typically provided through most state FAIR Plans, the Michigan Basic Property Insurance Association (MBPIA) offers comprehensive home coverage as well. The only typical existing qualifications are that the applicant own or rent a dwelling which is not used for farming or business within the state of Michigan. Operating a small typical home-based business does not disqualify the dwelling owner or renter from obtaining home coverage.

Although the Michigan FAIR Plan (MBPIA) is not considered an insurer of last resort like typical FAIR Plans, the association urges property owners and renters to shop the private insurance marketplace before applying to the MBPIA. This can often become difficult if the insurance companies view the consumer as high risk due to the volume or severity of claims filed.

The annual climate in Michigan compared to other states can be considered fairly normal except for the historical blistering winter storms. The state has contended with high winds and heavy rainfall as a result of hurricanes that made landfall in other states and then moved through Michigan as a severe or sometimes tropical storm. Hurricane Isabel, which was the deadliest and strongest hurricane in the 2003 Atlantic hurricane season, moved through several states before dumping extreme rainfall on states as far west as Michigan which is the area at the highest risk for hurricane claims. Michiganians also deal with severe winter storms like the Early December 2007 winter storm that brought significant snowfall which resulted in at least 16 deaths across the US including Detroit as well as thousands of home claims and millions of dollars paid out by the insurance companies.

Despite severe winter storms and other natural disasters that frequent the state, Michigan’s average homeowner insurance premium of $797 falls well below the national average of $952 which is plainly the result of property insurance companies ability to generate profits in the state thus creating competition for business and an overall savings on homeowner policy premiums.

As with all FAIR Plans, consumers are urged to try to find coverage in the private market and we can help you find an agent that can help you find alternatives to the FAIR Plan.