Michigan P&C Study Guide

The property and casualty half of Michigan law is best learned by address. National material hands you a guaranty cap and an assessment percentage as free-floating figures; Michigan puts its dollar limits somewhere counter-intuitive, indexes most of them so the printed number is never the whole answer, and deviates from the NAIC model twice. Learn where each rule lives and the citation questions become easy marks.

The limits are inside the definition — MCL 500.7925

The Michigan Property and Casualty Guaranty Association pays covered claims when a P&C insurer fails. The structural point that decides most questions about it: every dollar limit sits inside the definition of “covered claims” at MCL 500.7925, not in the obligations section. Four limits sit there, and three of them are indexed:

• Per-claim cap — statutory $5,000,000, excluding workers’ compensation claims and PIP benefits under MCL 500.3107 (MCL 500.7925(6)). The DIFS-certified 2026 figure is $7,980,000 (Bulletin 2026-04-INS).
• Insured net-worth exclusion — statutory $25,000,000; certified 2026 figure $39,920,000 (MCL 500.7925(4); Bulletin 2026-04-INS)
• Unearned premium refund cap — statutory first $500 per person per insolvent insurer; certified $2,063 for 1 July 2026 to 30 June 2027 (MCL 500.7925(2)(a); Bulletin 2026-13-INS)
• Minimum refund — no refund below $50 (MCL 500.7925(2)(a)), and this one does not move

Treat the statutory figure and the certified figure as two different things. The statute gives you the base and the mechanism; DIFS certifies the operative number by bulletin. Learn the base and the mechanism, and treat any specific dollar amount — including the ones printed above — as a certification with an expiry date.

Which claims qualify is also in 7925: those incurred before, at the time of, or within 30 days after the receiver was appointed (7925(1)(d)), on all kinds of insurance except life and disability (7925(1)(e)).

Four exclusions in the same section are worth knowing precisely. Obligations arising out of MCL 500.2001 to 500.2050 are out (7925(2)(c)) — so no unfair-trade-practice or bad-faith exposure passes to the association. Recoveries by other insurers, pools, HMOs or health care corporations are out (7925(3)). Nothing above the policy’s own limit is covered (7925(5)). And pre-receivership adjustment fees, attorney fees, court costs, interest and bond premiums are excluded (7925(7)).

Two clean deviations from the NAIC model

These are the discriminators, and both are single numbers with a clear source.

The assessment cap is 1%, not 2%. Member insurers may be assessed up to 1% of net direct premiums written in Michigan in the previous calendar year (MCL 500.7941(3)) — exactly half the NAIC model’s figure. Assessments run across five categories (MCL 500.7941(1)): workers’ compensation; automobile; title; fire and allied lines, including farmowner’s, homeowner’s multiple peril, inland marine, earthquake and credit; and all other except life and disability.

There is no per-claim deductible. The NAIC model carries a $100 retention. Michigan has none — read 7925 in full and no deductible, minimum claim amount or threshold appears. Michigan simply omitted it.

Other insurance comes first

MCL 500.7931(3) does not work like an ordinary other-insurance clause, so read it twice. A claimant must first exhaust all coverage under any other policy or self-insured retention. What is recoverable there then becomes a credit against the covered claim — and the same reduction flows through to reduce the insured’s own liability by that amount.

The association is a last resort by design, not a co-payer. It does not share a loss proportionally with other coverage.

The regulator, and two very different rate clocks

Michigan’s regulator is the Department of Insurance and Financial Services (DIFS), created by Executive Order 2013-1 and codified at MCL 550.991, headed by the Director. Older code sections still read “commissioner”; those functions transferred. DIFS supervises far more than insurers — banks, credit unions and HMOs sit under the same department, which is why it is “Insurance and Financial Services.”

On rates, the two personal-property lines run on opposite clocks:

• Home — file and use. An insurer may use home rates as soon as they are filed (MCL 500.2106(3)).
• Automobile — a 90-day wait. A manual or plan must remain on file for 90 days before taking effect, and the director may not extend that period (MCL 500.2108(6)). Earlier effectiveness is available only on written application.

One more locational point: Chapters 24 and 26 do not apply to automobile or home insurance (MCL 500.2106(1)). The commercial rating chapters are the wrong place to look for personal-lines rate rules.