Lakefront home insurance in Michigan starts with a regular homeowners policy, but a lake home has exposures that policy handles poorly: a dock and boat lift sitting in the water, a seawall that ice can push around, high water a homeowners policy excludes, boats with their own liability limits, and a summer of guests on the dock and the raft. Oakland County alone has more than 1,400 lakes, according to Oakland County Parks, and many of the homes on them are among the most valuable in their communities.
The short version: Lake homes don't cost more to rebuild than the same house inland, but they're usually higher-value homes with more to insure around the house. Check five things: your dwelling limit, how your docks and seawall are covered, flood, your boats, and your liability limits. The liability and flood gaps are the expensive ones.
Start with the house: the dwelling limit
A lakefront lot drives the market value of the home, but the land isn't what your homeowners policy insures. In Michigan it doesn't cost more to build a house on a lake than the same house elsewhere, so your dwelling limit (Coverage A) should be set from an accurate rebuild estimate of the house itself: its size, construction and finishes.
That estimate is where we find the most problems. When we quote homes insured through other agencies, the dwelling limit is often well below today's rebuild cost, and on some we've had to raise Coverage A by 30% or more. Lake homes tend to have been remodeled, expanded and upgraded over the years, which is exactly how a limit falls behind. Our guide on whether your home is insured for enough to rebuild explains how to check it.
Docks, boat lifts and seawalls
Structures on your property that aren't attached to the house are generally covered as "other structures" (Coverage B), commonly at 10% of the dwelling limit on standard forms. A dock, a boathouse and a detached garage can share that one limit, so add up what's on your shoreline. Carriers treat boat lifts and boathouses differently, so ask how yours are classified.
The bigger issue is the causes of damage these structures actually face. ISO's 2011 homeowners form (HO 00 03 05 11), which many carriers build from, does not cover loss caused by "freezing, thawing, pressure or weight of water or ice" to a retaining wall or bulkhead, or to a "pier, wharf or dock." The same form excludes flood, waves and "overflow of any body of water." Ice shove and high water are common causes of dock and seawall damage, and a standard form excludes both. Carriers' forms vary, and some high-value programs handle shoreline structures better, so this is worth comparing when you shop.
One practical note: Michigan's environmental agency, EGLE, says seasonal docks and hoists for private, noncommercial use don't need a permit, but permanent docks and boat hoists left in year-round do, and installing or replacing a seawall or other shoreline protection on an inland lake requires a permit. If you ever have a claim on a seawall, expect questions about how it was built.
Flood: the gap a homeowners policy won't fill
Homeowners policies exclude flood, including a lake rising into the house. Flood insurance is a separate policy through the National Flood Insurance Program or a private flood carrier. FEMA's flood maps do show high-risk flood zones (Zone AE) around Lake Orion, and lake homes elsewhere in Oakland County can be mapped the same way, so check your own property rather than assuming.
Know what NFIP coverage doesn't do. Its standard dwelling policy insures a home up to $250,000 and contents up to $100,000, generally takes effect 30 days after purchase, and specifically doesn't cover seawalls, bulkheads, piers, docks, boathouses or boats. Water coming up through a floor drain or sump is a different problem again; see our post on water backup coverage. For the full picture, read our Michigan flood insurance guide.
Boats, jet skis and the toys on the dock
Homeowners policies cover very little boat. Under ISO's form, the property coverage for watercraft, including trailers, furnishings, equipment and outboard engines, is limited to $1,500, and liability is excluded for an owned boat with outboards totaling more than 25 horsepower, or an owned or rented inboard over 50 horsepower or sailboat 26 feet or longer. A pontoon with a 90-horsepower outboard is over that line. The form also limits how boats are covered for wind, hail and theft. A separate boat policy fixes both the physical damage and the liability, and your boat insurance should carry liability limits that match your home and umbrella.
Two Michigan rules worth knowing when you're the one with the boat: anyone born on or after July 1, 1996 needs a boating safety certificate to run a boat with a motor over 6 horsepower, and personal watercraft operators born after December 31, 1978 need one too, and when you tow a skier or tuber, Michigan law requires a second person on board positioned to watch them. A guest's teenager driving your boat without a certificate is the kind of fact that turns into a liability claim.
Guests, the dock and liability
The biggest exposure on a lake home usually isn't the house. It's the people. Summer brings guests on the dock, kids jumping off the swim raft, neighbors' children in the water, and boat rides. Michigan's Recreational Use Act, which limits a landowner's liability to people using land for recreation without charge, generally won't help you: the Michigan Supreme Court held in Wymer v. Holmes (1987), a case about social guests injured in a backyard pond and a subdivision lake, that suburban and subdivided residential land isn't what that law was meant to cover.
That's why we push lake-home clients toward higher liability limits on the home, the boat and an umbrella. A personal umbrella sits on top of all three, but only if the underlying policies carry the limits the umbrella requires. Our posts on who needs umbrella insurance and umbrella underlying limits explain how it fits together.
Other things we check on a lake home
- The roof. Roofs over 20 years old are becoming an underwriting problem with many carriers, and some settle older roofs differently. See our post on insuring a home with an older roof.
- Seasonal use. If the home sits empty part of the year, many policies treat vacancy and unoccupancy differently. Tell your agent how the home is used.
- Seasonal help. A caretaker or housekeeper who works for you enough hours can trigger a Michigan workers' compensation requirement for household employers. Ask before the season starts.
- Valuables. Jewelry, art and collectibles have low limits on a standard policy unless they're scheduled.
Frequently Asked Questions
Does homeowners insurance cover my dock in Michigan?
Usually as an "other structure," under a limit that's commonly 10% of your dwelling coverage and shared with other detached structures. But ISO's standard form excludes damage to a dock or seawall caused by freezing, thawing or the pressure of ice, and excludes flood, waves and lake overflow, which are common ways docks get damaged. Coverage varies by carrier, so compare the forms.
Is lakefront home insurance more expensive in Michigan?
The house itself doesn't cost more to rebuild because it's on a lake. Lake homes tend to cost more to insure because they're higher-value homes with more around them: docks, boats, detached structures and more guests, which is why higher liability limits and an umbrella usually make sense.
Do I need flood insurance for a lake house in Michigan?
If the house is in a mapped high-risk flood zone, virtually any mortgage lender will require flood insurance. Even outside one, homeowners insurance excludes flood. FEMA maps show high-risk flood zones around Lake Orion, so check your property's flood zone before deciding. NFIP flood policies generally take effect 30 days after purchase and don't cover docks, seawalls or boathouses.
Does my homeowners policy cover my boat?
Only barely. ISO's standard form limits watercraft property coverage to $1,500 and excludes liability for owned boats over 25 horsepower outboard or 50 horsepower inboard, or sailboats 26 feet and longer. Most lake families need a separate boat policy.
Am I liable if a guest gets hurt on my dock?
You can be, and Michigan's Recreational Use Act generally won't protect a residential homeowner hosting social guests. That's what your homeowners liability coverage and a personal umbrella are for. On a lake home we recommend higher limits on the home, the boat and an umbrella.
The bottom line
A lake home is worth insuring around, not just insuring. The house needs an accurate rebuild number, and everything around it, the dock, the seawall, the water and the people, needs a plan.
J. Jacobs & Associates is an independent agency in Lake Orion, in the middle of Oakland County's lake country, and we've insured Michigan homes since 1981. We represent more than twenty carriers, including companies built for higher-value homes, so we can compare how each one handles your house, your shoreline and your boats. Send us your current homeowners, boat and umbrella declarations pages, or call (248) 693-6455. You can also start a homeowners quote online.