Whether the dwelling coverage on your policy would actually rebuild your house — and what a shortfall costs you at claim time. Planning estimate only, not an appraisal.
Your renewal jumped and the carrier said 'rates went up.' Here is what is actually driving it, how to tell whether yours outran your state's, and the four levers that genuinely move the number.
Flood and earth movement are excluded from every standard homeowners policy — and the clause that excludes them is written so a wind-and-water loss can be denied entirely. Here is what is out, and what fills each gap.
Non-renewed, cancelled, or declined: read the notice correctly, stop force-placed insurance, fix the reason code on it, and get the house insured again in 30 days.
The exact sequence to run when your house is damaged — mitigation, documentation, the claim call script, the adjuster visit, reading the estimate, and every escalation step in order.
Michigan guide
From Home Insurance in Michigan: What It Costs and What Actually Covers You
This is the section that matters most in Michigan, because Michigan has the widest gap in this dataset between what a house is worth and what it costs to rebuild.
Your dwelling limit (Coverage A) should be the cost to rebuild your home from the foundation up, at today's construction prices, on the lot you already own. It is not your mortgage balance — that is what a bank is owed, an unrelated number. And it is not market value, because market value includes land, and land does not burn down.
The rebuild-cost figure this site uses for Michigan is $230 per square foot, the midpoint of a published $170-$290 band. That is construction cost — materials, labor, and general contractor overhead and profit to rebuild finished living area — and it excludes land.
For a 2,000-square-foot Michigan home:
Now set that against Michigan's statewide median home price of $299,900.
The midpoint rebuild estimate for a mid-sized Michigan home is roughly $160,000 above the statewide median sale price — more than 50% above it. Even the bottom of the band, $340,000, exceeds the median price.
That gap is the single most important thing in this article. In a state where houses are affordable relative to construction costs, market value systematically understates rebuild cost, and a homeowner who reasons "my house is worth $300,000, so $300,000 of coverage is plenty" is not being careless — they are being sensible in a way that happens to be wrong by six figures. Michigan is close to a worst case for that particular error.
Two honest caveats on the $230 figure. It comes from a coarse cost band that Michigan shares exactly with Indiana and Maine, making it a regional construction-cost band applied to Michigan rather than a Michigan-specific survey. And a 2026 cross-check puts Michigan at $160 per square foot — a narrower measure that excludes general contractor overhead and profit, but low enough to be worth knowing about. No Michigan building department or insurance regulator publishes a competing rebuild-cost figure. Use the band, then get a real replacement-cost estimate from your carrier or an independent estimator.
Most homeowners policies contain a coinsurance provision, commonly set at 80%. To get full replacement-cost settlement on a partial loss — and nearly every claim is partial — you must carry dwelling coverage of at least 80% of your home's full replacement cost. Fall below that line and your partial-loss payment is reduced proportionally, across the entire claim rather than just the shortfall.
Work it on that 2,000-square-foot Michigan home with a $460,000 replacement cost:
And if that policy happened to carry a 2% wind/hail deductible instead of the flat $1,000 — $300,000 x 2% = $6,000 — the payment drops to $67,370, and your total out-of-pocket is over $22,600.
On a total loss the arithmetic is worse and simpler: you carried $300,000 against a $460,000 rebuild, and you are $160,000 short of a finished house.
The fix: get your replacement cost re-estimated every few years and after any renovation. Ask your carrier whether your policy includes extended replacement cost (typically an extra 10-50% above your dwelling limit if rebuilding costs spike) and inflation guard (an automatic annual increase to your limit). Both are inexpensive relative to what they protect. And when a carrier's quoting system proposes a dwelling limit noticeably below what section 4's math suggests, ask how it was derived rather than accepting it because it lowers the premium.
Read the full Michigan guide →18 min read · Updated 2026-08-28