How Bankrate chose the best homeowners insurance in Michigan
If you are looking for the best Michigan homeowners insurance, there are a number of factors you might want to consider. Bankrate’s insurance editorial team partnered with Quadrant Information Services to obtain up-to-date premium information for the largest companies in the state by market share. After analyzing the premiums, we reviewed each company’s coverage offerings, discounts, policy features, J.D. Power customer satisfaction scores and AM Best financial strength ratings.
- Michigan homeowners pay an average of 7% less per year for home insurance than homeowners nationwide, based on 2022 rates.
- On average, insuring a home in Michigan is substantially cheaper than insuring a vehicle.
- Common causes of home damage in Michigan include severe weather, burglary and water damage.
Best home insurance companies in Michigan
As we searched for the best home insurance in Michigan, we looked at average rates, coverage types, discounts, and third-party scores from J.D. Power and AM Best. We compiled all these aspects into a proprietary Bankrate Score on a scale of 0.0 to 5.0. The higher a company’s score, the more highly that company ranked in the scoring categories. Understanding and comparing these aspects of each homeowners insurance company could help you identify if that company is a good fit for your needs. These considerations can also demonstrate where each company excels and where it might lag behind competitors.
If you are getting quotes for Michigan home insurance, you might want to add these companies to your list:
| Company | Bankrate Score | Average premium* | J.D. Power score | AM Best rating |
|---|---|---|---|---|
| USAA** | 4.8 | $862 | 882/1,000 | A++ |
| State Farm | 4.7 | $1,297 | 835/1,000 | A++ |
| Allstate | 3.9 | $1,291 | 829/1,000 | A+ |
| Farmers | 3.8 | $2,339 | 813/1,000 | A- |
| The Hanover | 3.2 | $1,703 | Not rated | A |
*Rates are for annual policies with $250,000 in dwelling coverage
**Not officially ranked by J.D. Power due to eligibility restrictions
USAA
USAA received the highest score for customer satisfaction from J.D. Power, but the company is not eligible for official ranking because it only serves active-duty military members, veterans and their eligible family members. If you qualify, though, you may find that USAA offers below-average rates and exceptional customer service. The company does not offer many discounts, but it does offer numerous optional endorsements that may benefit military members, including earthquake coverage and home sharing coverage. Under a USAA homeowners insurance policy, military uniforms are also covered in certain scenarios.
Learn more: USAA Insurance review
State Farm
State Farm has exclusive agents in communities throughout Michigan, so if you like to handle insurance in person, State Farm could be a good fit. You might also consider State Farm for homeowners insurance if you have a new or upgraded roof. The company offers discounts for roof age, material and impact resistance. State Farm scored below average in the 2021 J.D. Power U.S. Property Claims Satisfaction Study, which may indicate below-average claims satisfaction. However, the insurer carries an A++ (Superior) financial strength rating from AM Best.
Learn more: State Farm Insurance review
Allstate
With Allstate, you may be able to add options like water backup coverage, electronic data recovery, business property coverage and coverage for musical instruments to your homeowners insurance policy. Allstate also offers a HostAdvantage package, which provides coverage if you rent your home as a short-term rental. The company offers several discounts that might help you lower the cost of your policy. Allstate has a higher-than-average complaint index from the National Association of Insurance Commissioners (NAIC), though. A score of 1.00 represents a baseline number of complaints; Allstate’s home insurance index is 1.34.
Learn more: Allstate Insurance review
Farmers
When you get a home insurance quote from Farmers Insurance Group, you start by selecting one of its three coverage packages: Standard, Enhanced or Premier. From there, you can personalize your policy with endorsements like declining deductible, claim forgiveness and cosmetic damage coverage. Although the company did receive a below-industry-average rating from J.D. Power for overall home insurance customer satisfaction, it was ranked above average in the 2021 J.D. Power U.S. Property Claims Satisfaction Study, so policyholders appear to be generally satisfied with Farmers’ claims service.
Learn more: Farmers Insurance review
The Hanover
The Hanover is unrated by J.D. Power as its home insurance market is limited to 18 states, but has an A (Excellent) AM Best financial strength rating. This means Michigan policyholders may have better peace of mind knowing the insurance company has a history of financial stability and a strong track record of paying covered claims. While The Hanover’s average premium is higher than the state’s average, there are several valuable options for coverage, including a “prestige” option for high-value homes. You could also add service line coverage and guaranteed replacement cost for a more robust policy.
Learn more: The Hanover Insurance review
How much is homeowners insurance in Michigan?
A homeowners insurance policy with $250,000 in dwelling coverage costs an average of $1,292 per year in Michigan, which is nearly 7% less than the national average annual cost of home insurance of $1,383. These home insurance rates may be surprising since Michigan auto insurance rates are much higher, on average, than in most states.
Although no state is completely safe from natural disasters, Michigan does not experience as many extreme catastrophic weather events as some other states, which likely contributes to lower homeowners insurance costs. Summer storms are relatively common across the state, but tornadoes are not nearly as widespread as they are in the Midwest’s “Tornado Alley.” However, Michigan did experience 17 tornadoes in 2021, according to the Insurance Information Institute (Triple-I). On the other hand, Michigan’s northern positioning and the surrounding Great Lakes can make winter weather particularly harsh, with numerous snow and ice events.
Common causes of home damage in Michigan
If you own a home in Michigan, you may first want to understand the common causes of home damage in the state. This information can help you choose the coverage types you may need to protect your finances from those threats.
Common causes of claims in Michigan
While extreme weather events that lead to natural disasters may be uncommon in Michigan, homeowners should be prepared for a wide array of weather events that can still lead to home damage on a smaller scale. With hot summers and cold winters, weather in this state can change drastically throughout the year. Even so, the weather is not the only cause of home damage. In Michigan, some common causes of property damage are:
- Flooding: Counties in the southeast part of the state are at a higher-than-average risk of floods, with an average National Flood Insurance Program (NFIP) claim payout of $10,900.
- Wind: Winds in Michigan can be fierce all year, especially along the lake coasts — and Michigan has plenty of coastline along four of the Great Lakes. Severe windstorms can damage roofs, siding, windows and other exterior areas of your home, as well as property stored outside.
- Burglary and theft: Especially in metropolitan areas of the state, the risk of burglary and theft increases. These events can damage your home and cause the loss of your personal belongings.
- Water damage: Whether from heavy rains, melting snow, ice storms or water backup, water damage happens often in Michigan.
Understanding the common causes of damage in your area can help you decide what coverage to add to your insurance.
Home insurance coverage options in Michigan
When you buy a homeowners policy in Michigan, the policy usually includes standard coverage types, like dwelling coverage, personal property coverage and liability coverage. But a standard policy may not cover you for all of the threats to your home. You may also want to consider these additional coverage options:
- Flood insurance: Flood damage is not covered by a standard homeowners insurance policy and coverage typically requires its own policy, although some companies offer the coverage as an endorsement. If you have a mortgage or home loan and are in a designated flood zone, your lender may require you to buy flood insurance. Flood policies are available through the federally-backed NFIP and dozens of private flood insurers.
- Water backup coverage: This coverage is usually offered as an endorsement and provides financial protection for the damage caused by water backing up in a sewer or drain line or if your sump pump fails. This type of damage is relatively common in basements and crawl spaces, but it can happen from any water line in the house.
- Identity theft coverage: As more personal information is stored online, it is becoming easier for thieves to steal your identity and cause you financial and reputational harm. This endorsement helps provide coverage for the costs of restoring your stolen identity.
Because Michigan has such unique factors for homeowners, with hot summers, long winters and lots of water, working with a professional insurance agent to help you decide what coverage options are appropriate for your situation might be beneficial.
Frequently asked questions
Learn more
- Best homeowners insurance companies
- Guide to home insurance
- How much homeowners insurance do you need?
- First-time home buyers insurance
- Explore homeowners insurance rates by state
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