What is a Fire Insurance Withholding?
Sections 500.2227 and 500.2845 of the Michigan Insurance Code allow municipalities which participate in the fire insurance withholding program to escrow 25% of a fire insurance settlement for losses which meet established criteria to real property within the boundaries of the municipality. For residential property, the 25% settlement shall not exceed a maximum amount which is adjusted annually, beginning June 1, 1999, from the original maximum of $6,000, in accordance with the consumer price index. The new fire insurance maximum withholding amount effective June 1, 2010, through May 31, 2011, is $7,812.
**Additional information regarding the withholding act is on the State of Michigan website, type in 'Fire Insurance Withholding'.