Michigan Property Study Guide

Learn Michigan property law as a set of departures from what national material teaches. National courses teach a standard fire policy you can read line by line — Michigan repealed the form and kept the coverage. They teach that a fire settlement is paid to the insured — Michigan routes a quarter of it through a municipal treasurer. They teach claim-history underwriting as a matter of company appetite — Michigan writes the test into statute. Three departures, and they carry most of this paper’s state content.

The form was repealed — the coverage floor was not

MCL 500.2832, Michigan’s standard fire policy, was struck by 1990 PA 305, effective 1 January 1992. A candidate who reads the repealer and stops there answers “Michigan has no standard fire policy” — and then loses everything downstream of it.

The next subsection is the one that matters. MCL 500.2833(2) requires every fire policy issued in Michigan to contain “at a minimum, the coverage provided in the standard fire policy under former section 2832.” The form is gone; the coverage floor survives, defined by reference to a form that no longer exists — and it sits on top of the nineteen mandatory provisions of MCL 500.2833(1).

The nineteen provisions — where the clocks live

Those provisions are the testable content, and nearly every one of them is a deadline.

Cancellation requires not less than 10 days’ written notice, with the minimum earned premium not less than pro rata or $25, whichever is greater (MCL 500.2833(1)(i)). A mortgagee gets its own 10 days’ notice and then 60 days to render proof of loss ((1)(j)) — two numbers in one provision, which is exactly why examiners like it.

Appraisal runs on a pair: 20 days to name appraisers, then 15 days for the appraisers to agree on an umpire; failing that, a circuit judge appoints one ((1)(m)). The loss is payable within 30 days after receipt of proof of the amount of loss ((1)(p)). Suit must be brought within 1 year of the loss, or within the policy period if longer — and the clock is tolled from notice of loss until the insurer formally denies the claim ((1)(q)).

One provision is not a deadline at all: coverage attaches at 12:01 a.m. standard time at the location of the property ((1)(s)) — the property’s local time, not the insurer’s.

Twenty-five percent goes to the treasurer

The fire-loss escrow is the rule nobody expects. The insurer withholds 25% of the actual cash value or of the final settlement, whichever is less, and forwards it to the city, village or township treasurer, which holds it in escrow and releases it as the structure is secured, repaired or demolished; anything unused returns to the insured.

Two conditions narrow it, and they are as testable as the percentage: it bites only where the final settlement exceeds 49% of the insurance, and only in municipalities that have elected onto the department’s list. Two parallel sections run the machinery — MCL 500.2845, covering fire and explosion with its own $12,000 adjusted cap, and MCL 500.2227 for larger counties and municipalities across a wider list of perils including vandalism, wind, hail and riot, whose maximum is $25,090 for 1 July 2026 through 30 June 2027 (DIFS Bulletin 2026-16-INS). Learn the mechanism and the 25%; the ceilings move.

Underwriting a Michigan home — learn the shape, not the figures

Nonrenewal on claim history is permitted only on 3 paid claims in the immediately preceding 3 years totalling a threshold amount — and Michigan writes two thresholds into the statute, a lower one that excludes weather-related claims and a higher one that includes them. Liability claims are excluded entirely (MCL 500.2117(2)(e)(i)). The statutory figures are $3,000 and $4,000, indexed every sixth year under 2117(5), with DIFS Bulletin 2024-02-INS certifying $5,000 and $6,600 from 1 January 2024. An insurer may set a higher threshold for insureds of 5 to 10 years’ standing ((2)(e)(ii)).

Two limits travel with it: a repair-cost policy’s premium may not exceed 105% of the premium for coverage at 80% of replacement cost (2117(4)), and vacancy is an underwriting ground only after more than 60 days plus evidence of an intent to vacate ((2)(g)).

When the admitted market will not write the risk, Michigan’s FAIR plan is the Michigan Basic Property Insurance Association (MCL 500.2901 et seq.). Its optional water-damage endorsement covers up to $5,000 for damage from rain, ice, snow or sleet — and expressly not flood, sewer backup or groundwater seepage.