MI HB5862

Increases the maximum withholding cap for residential property fire insurance claims from $6,000 to $12,000, effective January 1, 2015, with annual adjustments based on the consumer price index.

Applies to insurers withholding 25% of actual cash value or final settlement (whichever is less) for fire, explosion, vandalism, malicious mischief, wind, hail, riot, or civil commotion losses under Section 2227 (larger counties and municipalities with 50,000+ population).

Applies identical withholding cap increase to Section 2845, which covers fire and explosion losses in smaller counties and municipalities.

Requires insurers to place withheld funds into trust or escrow accounts maintained by local treasurers, with funds released once property is repaired, replaced, removed, or when repair contracts are executed.

Maintains exemptions allowing insurers to avoid withholding if insured provides repair contract within 15 days of settlement and consents to direct payment to contractor.