What is Title Insurance in Michigan?
Title insurance is an important cost component within Closing Costs that always intrigues a first time home buyer. Title insurance in Michigan protects buyers and lenders from financial liabilities that may arise due to a title defect or a hidden lien.
Have a look at our Title Insurance explainer video to see how title insurance can protect your lender and your ownership in case of a title defect.
There are two types of Michigan title insurance policies: Lender’s Title Insurance Policy and Owner’s Title Insurance Policy.
Lenders in Michigan often require borrowers to purchase a Michigan Lender’s Title Insurance Policy which guarantees protection for Michigan lenders against issues arising out of defects on the title of a Michigan property. On the other hand, the Michigan Owner's Title Insurance Policy protects the buyer against claims and liens.
Title insurance policy premiums in Michigan show up as an itemized list of a closing cost worksheet for a buyer and seller such as a Closing Disclosure, Loan Estimate, HUD-1, or an ALTA Settlement Statement. If you're looking to get a preview of what these costs look like, use this free Michigan title insurance calculator.
How much does title insurance cost in Michigan?
For a $250,000 property, you are going to pay a total of $1,118 for the owner’s policy and $787 for the lender’s policy.
Here are some more use cases:
- For a purchase price of a $300,000 property in Michigan with a 20% down payment ($60,000), the cost of title insurance policy and lender's policy are $1,424 and $882 respectively.
- For a purchase price of a $300,000 property in Michigan bought with full cash, the cost of the title insurance owner's policy is $1,424.
- For a purchase price of a $500,000 property in Michigan with a 20% down payment ($100,000), the cost of the title insurance owner's policy and lender's policy are $1,948 and $1202 respectively.
- For a purchase price of a $500,000 property in Michigan bought with full cash, the cost of the title insurance owner's policy is $1,948.
- For a purchase price of a $1,000,000 property in Michigan with a 20% downpayment ($200,000), the cost of the title insurance owner's policy and lender's policy are $3,258 and $2002 respectively.
- For a purchase price of a $1,000,000 property in Michigan bought with full cash, the cost of the title insurance owner's policy is $3,258.
How is Title Insurance Calculated in Michigan?
Michigan has multiple pricing slabs based on the type of policy. There’s the ALTA Policy that gives you standard coverage while the Eagle Policy gives you extended coverage and costs more than the ALTA Policy. Here we will consider the prices for the ALTA Policy.
Cost of Owner's Policy
| Property Rate | ALTA Cost of Owner’s Policy (per $1000) |
| $275 for $1000 | |
| $1,001 - $50,000 | $5.20 |
| $50,001 - $100,000 | $4.20 |
| $100,001 - $200,000 | $3.67 |
| $200,001 - $300,000 | $3.15 |
| $300,001 - $1,000,000 | $2.62 |
| Above $1,000,000 | $2.10 |
Cost of Lender’s Policy
| Property Rate | ALTA Cost of Owner’s Policy (per $1000) |
| $192.5 for $1000 | |
| $1,001 - $50,000 | $3.15 |
| $50,001 - $100,000 | $2.50 |
| $100,001 - $200,000 | $2.20 |
| $200,001 - $300,000 | $1.90 |
| $300,001 - $1,000,000 | $1.60 |
| Above $1,000,000 | $1.25 |
Say you want to calculate the cost of the owner's title policy for a $200,000 property in Michigan. The total cost will be:
What is the Owner's Title policy in Michigan?
The owner's policy is a legal document that shields the owners from unknown defects such as missing heirs, incorrect documentation, unjust court proceedings, and protects their ownership. The owner’s policy contributes to the majority of the costs that go into purchasing the title insurance.
What is Lender’s Title policy in Michigan?
The lender’s policy is often purchased along with the owner’s policy. It protects the lender from title defects such as a pending construction lien on the property, errors in the title, and other issues that may arise after the title has been transferred to the buyer.
What is not covered in Title Insurance in Michigan?
Title insurance may not cover the following:
- Damages due to natural calamities such as thunderstorms.
- Losses due to infestation
- Financial losses due to repair and maintenance of items
- Damage due to a fire
How long is the title policy valid in Michigan?
The title policy remains valid till the time you remain the owner of the property. Only when you decide to sell, a new policy must be made in the name of the buyer.
Who regulates Title Insurance in Michigan?
The Michigan Insurance Bureau regulates the prices for title insurance in the state of Michigan.
Who pays for Title Insurance in Michigan?
Title insurance fees can be paid by either of the parties however it is mostly the seller that pays for the owner's title policy while the loan policy is paid by the buyer.
Is Title insurance required in Michigan?
Title insurance is not required by law in Michigan however it is always best to purchase a title policy before a deal is signed between the buyer and the seller.
Should you shop for title insurance in Michigan?
You can definitely shop for title insurance in the state of Michigan by approaching any reputable title company. However, if you are skeptical, you can ask your agent or lender to help you out with the process.
Is there any discount on Title Insurance Policy in Michigan?
Technically there is no discount on title insurance in Michigan. However, selling a property within 5 years will save you the cost of buying title insurance.