Homeowners Insurance in Pontiac, Michigan (2024)

Let’s see how these Michiganders can protect their properties with a Pontiac homeowners insurance policy.

The average cost of home insurance in Pontiac, Michigan, is about $1,900 annually, or about 10% below the state average of about $2,114 annually. While neighboring cities like Troy or Novi see rates a bit further below the state average, there are many factors to consider when looking at a city’s average premiums.

Insurers consider all kinds of factors when calculating your premiums, ranging from specific characteristics about you or your home to statistics pertaining to your city and state. While things like your credit history, claims history, home replacement cost, and home age will certainly play a role in your premium calculations, things like your area’s crime rates and the likelihood of experiencing severe weather may be weighed more heavily.

This leads us to why Pontiac’s rates may be so high compared with those of other cities in Oakland County and Michigan as a whole. Pontiac is in the eighth percentile for safety, which means only 8% of cities are more dangerous. Crime rates, especially when they’re notably high, can play a role in premium determination. This is because homeowners in a city with high crime rates may have an above-average risk of filing a claim for theft or property damage. 

Another factor that can play a remarkably large role in your premium calculation is how much dwelling coverage you have on your home insurance policy. Let’s break down average rates in Pontiac while adjusting the amount of dwelling coverage. 

The table above shows that adjusting dwelling coverage by about $100,000 in Pontiac, Michigan, can change premiums by over $630 annually. The amount of dwelling coverage you have on your policy largely depends on your home’s replacement cost. 

Now, replacement cost and the price you buy or sell your home for aren’t quite the same thing because replacement cost value only refers to the cost associated with building the structure of your home (materials, construction, and labor costs) and doesn’t account for property value. 

Typically, insurers require homeowners to have a dwelling coverage limit covering at least 80% of their home’s replacement cost.

For example, Michigan ranks 48th in median home sales price, meaning home costs are comparatively low. So, let’s say your home’s replacement cost is about $250,000. If you choose to insure 80% of your home’s replacement cost with dwelling coverage, your dwelling coverage limit will be $200,000, meaning your premium might be about $1,267 annually. This also means in the event that your home has to be totally rebuilt, you would have to kick in that remaining 20% of your home’s replacement cost, or $50,000 out-of-pocket. 

The best Pontiac property insurance isn’t one specific policy from one specific insurer. In Michigan, some of the top insurers are Frankenmuth, State Farm, and AAA, but that doesn’t mean the best policy for your needs will come from one of these every time.

Insurance is highly subjective based on the individual, and the best policy will depend on what you value most from your coverage. While some people value protection regardless of the cost, others may be fine maintaining the minimum amount of coverage if it means they’ll save some money on their bills.

Let’s examine some of the pros and cons of coverage vs. savings to decide which you value more from your policy.

Technically, no, there isn’t a law in Pontiac or anywhere else in Michigan that requires homeowners to maintain a home insurance policy. However, if you purchase your home with the help of a mortgage lender, they will require you to maintain a home insurance policy. If you fail to maintain a policy, or if your insurer drops you during your loan period, your lender will bind another policy for you.

When your mortgage lender binds a policy for you, it’s called force-placed insurance. A force-placed insurance policy serves the mortgage lender’s best interest, often providing subpar coverage at steep prices. Thus, it’s bound to be more expensive than a policy you would choose for yourself. 

You technically don’t need a policy if you own your home outright. However, maintaining some coverage is always wise, as it can save you a lot of money in the face of disaster.

While home insurance isn’t required in Pontiac or in Michigan as a whole, many residents still maintain policies. While home insurance can be subjective, the types of coverage that appear on a standard policy will likely be the same across the board. Here are the coverage types homeowners with Pontiac property insurance can expect from their insurance policies. 

Coverage A, or dwelling coverage, covers the parts of your home like the roof, walls, doors, windows, plumbing, HVAC system, and more. In short, it covers the elements of your home that make up its structure. So, if the parts of your home covered by dwelling coverage suffer damage from a covered peril on your policy, this is the part of your policy that would help you rebuild or replace those parts. 

Coverage B, or other structures coverage, may help protect things on your property like your pool, fence, shed, carport, or garage. In other words, it helps cover the structures on your property that aren’t attached to your main home. So, if a tornado rolls through your yard and completely destroys your shed, Coverage B may help you build a new one.

Coverage C, or personal property coverage, is the part of your policy that covers the things you store inside your home or on your property. This part of your policy helps cover things like your furniture, clothing, electronics, sports equipment, and much more. So, if that tornado that rolled through your yard and destroyed your shed took your stored patio furniture with it, Coverage C on your policy may help you replace the set. 

Coverage D, or loss of use coverage, can help you pay for basic necessities if your home is completely destroyed, rendering it unlivable. Coverage D can help you cover costs for things like temporary lodging, pet boarding, gasoline, groceries, and other necessities. 

Coverage E, or personal liability coverage, is the portion of your policy that protects your liability. It can help if a guest is injured on your property and you’re considered at fault or if you damage someone else’s property. It can help you pay for your guest’s medical expenses or your own legal fees. 

Coverage F, or medical payments coverage, is similar to liability coverage but with a couple of key differences. Coverage F only covers medical expenses for a guest’s minor injuries sustained on your property, and it can be used regardless of who was at fault. 

While not located near one of Michigan’s major lakes, Pontiac residents may still experience flooding due to heavy storms or snowfall. Unfortunately, flooding isn’t covered by a homeowners insurance policy. 

However, residents concerned about paying out of pocket for flood damage can purchase a separate Michigan flood insurance policy to help them recoup financially after the storm clears. Flood insurance policies can be purchased through a private insurer or the National Flood Insurance Program (NFIP).

While some residents may prefer great coverage regardless of the cost, others are on the hunt for the cheapest home insurance in Pontiac, Michigan that they can find. While policies are highly subjective and rates vary based on the individual, everyone can get quotes and select the insurer with the lowest quoted rates. 

However, if you want to take it a step further and truly lower your rates as far as they go, there may be some extra steps you can take.

Often, with home insurance, you get what you pay for. If you pay lower rates, you likely don’t have the most inclusive coverage; if you pay higher rates, you’re paying for more coverage than others. So, if you’re looking to lower your rates, you may decide to sacrifice some of your coverage to bring your premiums down.

For example, many people limit their dwelling coverage to their home’s replacement cost. Since premiums are highly dependent on your dwelling coverage limit, lowering it to the minimum limit of 80% of your home’s replacement cost can significantly affect your premiums. However, that means you’ll owe 20% of your home’s replacement cost if a peril damages your home and it must be completely rebuilt. 

An easy way to lower your premiums that doesn’t really affect how well you’re covered is how you set your deductible. Policyholders can set a low deductible to receive higher premiums or a high deductible to receive lower premiums.

The only downside here is that, in the event of a claim, if you set a high deductible to get lower premiums, you may wind up owing more before your insurance coverage kicks in to cover the rest.

Perhaps the easiest, most hassle-free way to lower your premiums is to utilize discounts. Insurers offer a range of discounts for all sorts of things, like characteristics about your home or about you as a policyholder. For example, many insurers offer lower rates to policyholders who purchase a new construction home or a home in a gated community. Similarly, insurers may also offer policyholders lower premiums if they pay their premiums annually instead of monthly. 

Whether you live in Pontiac to benefit from living in the top county in the Great Lakes State or simply because you love it, no matter what some statistic says, you’ll want an adequate homeowners insurance policy to ensure your property. With homeowners insurance, you can enjoy what you love about your city with the peace of mind that your home is safely covered. 

The best way to get a homeowners insurance policy that meets your needs is to get and compare quotes from multiple insurers. This way, you can see several policies and pick the one that sounds best for you. Luckily, we have a quoting tool right here at Clovered, so you don’t have to wait any longer for that perfect policy. You can also call 833-255-4117 or email [email protected] if you’d rather speak directly with a licensed insurance agent.