Fire Insurance Contracts, the Michigan standard policy

What this document is

Michigan Insurance Code of 1956, Chapter 28 - Fire Insurance Contracts, the Michigan standard policy (MCL 500.2804 to 500.2866, 13 sections) is a state statute published by Michigan Legislature (www.legislature.mi.gov). It is one of the Michigan documents that insurance license exam questions are written from, including michigan property & casualty, michigan personal lines practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• MCL 500.2833(1)(a) (Fire insurance policy; mandatory provisions; coverage)

  “(1) Each fire insurance policy issued or delivered in this state shall contain the following provisions: (a) That the policy shall provide, at a minimum, coverage for the actual cash value of the property at the time of the loss, subject to all other provisions contained herein.”

• MCL 500.2833(1)(m) (Fire insurance policy; mandatory provisions; appraisal)

  “(m) That if the insured and insurer fail to agree on the actual cash value or amount of the loss, either party may make a written demand that the amount of the loss or the actual cash value be set by appraisal. If either makes a written demand for appraisal, each party shall select a competent,...”

• MCL 500.2827(2) (Fire policy providing reimbursement; cash settlement)

  “(2) The contract of insurance established pursuant to subsection (1) shall not preclude an insured from selecting a cash settlement based on the actual cash value of the lost or damaged insured property at the time of the loss or damage, but not to exceed the amount of liability covered by the contract.”

• MCL 500.2836(1) (Breach of warranty or condition as defense)

  “(1) An insurer shall not base a defense under the terms of a fire insurance policy permitted to be used in this state, upon a breach of warranty or condition occurring before loss, unless the breach exists at the time of the loss or contributes to the loss or to the amount of the loss.”

• MCL 500.2810 (Printing regulations on fire policy)

  “If a fire policy is issued by a mutual, cooperative, or reciprocal insurer having special regulations with respect to the payment by the policyholder of assessments, the regulations shall be printed upon the policy, and the insurer may print upon the policy regulations as may be required by its...”

• MCL 500.2833(1)(n) and (o) (Fire insurance policy; mandatory provisions)

  “(n) That the insurer may repair, replace, rebuild, or take the property. (o) That there can be no abandonment to the insurer of any property.”

• MCL 500.2833(1)(c) (Fire insurance policy; mandatory provisions; coverage)

  “That the policy may be void on the basis of misrepresentation, fraud, or concealment.”

• MCL 500.2826 (Liability for difference between actual value of property and amount expended to repair, rebuild, or replace)

  “An insurer may issue a fire insurance policy, insuring property, by which the insurer agrees to reimburse and indemnify the insured for the difference between the actual value of the insured property at the time any loss or damages occurs, and the amount actually expended to repair, rebuild, or...”

• MCL 500.2833(1)(j) (Fire insurance policy; mandatory provisions; mortgagee clause)

  “That if a loss is payable under the policy, in whole or in part, to a designated mortgagee not named in the policy as the insured, the interest in the policy may be canceled by the insurer by giving to the mortgagee not less than 10 days' written notice of cancellation. If the insured fails to...”

• MCL 500.2833(1)(k) (Fire insurance policy; mandatory provisions; other insurance)

  “That the insurer's liability shall not be greater than the pro rata share with other insurance for the peril involved.”

• MCL 500.2842 (Average or pro rata clause; form; filing and approval)

  “(1) An insurer authorized to do business within this state may attach to an existing policy or to one to be issued by the insurer an average or pro rata clause. (2) The average or pro rata clause shall be made substantially in the following form: "It is hereby agreed, in case of loss, this policy...”

• MCL 500.2833(1)(q) (Fire insurance policy; mandatory provisions; action under the policy)

  “(q) That an action under the policy may be commenced only after compliance with the policy requirements. An action must be commenced within 1 year after the loss or within the time period specified in the policy, whichever is longer. The time for commencing an action is tolled from the time the...”

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