What is a debtor's obligation regarding insurance in closed-end transactions in Michigan?

In closed-end transactions in Michigan, a debtor’s obligation regarding insurance permits the inclusion of insurance costs in the total amount financed. This means that while the debtor is not explicitly required to purchase insurance, if they choose to do so, the lender can incorporate those costs into the loan amount. This is a common practice because it helps streamline the purchase process for the debtor by allowing them to finance the insurance premium along with the cost of the loan, making it more manageable within their budget.

Additionally, this approach facilitates the lender's ability to ensure that adequate insurance coverage is in place to protect the collateral backing the loan, contributing to the overall security of the financing arrangement. This practice of adding insurance costs to the financing amount aligns with regulatory expectations and standard industry practices.