What is Title Insurance in Minnesota?

Title insurance is an important cost component within Closing Costs that always intrigues a first time home buyer. Title insurance in Minnesota 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 Minnesota title insurance policies: Lender’s Title Insurance Policy and Owner’s Title Insurance Policy.

Lenders in Minnesota often require borrowers to purchase a Minnesota Lender’s Title Insurance Policy which guarantees protection for Minnesota lenders against issues arising out of defects on the title of a Minnesota property. On the other hand, the Minnesota Owner's Title Insurance Policy protects the buyer against claims and liens. 

Title insurance policy premiums in Minnesota 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 Minnesota title insurance calculator.

How is Title Insurance Calculated in Minnesota?

Minnesota has 5 pricing slabs for both owner’s and lender’s policy to help you calculate the net amount. These are:

 

Property Rate Cost of Owner’s Policy (per $1000)
$0 - $50,000 $ 4.00 
$50,001 - $100,000 $ 3.75 
$100,001 - $150,000 $ 3.25 
$150,001 - $250,000 $ 2.50 
$250,001 - $300,000 $ 2.25 
$300,001 - $500,000 $ 2.25 
$500,001 - $1,000,000 $ 2.00 
$1,000,000 + $ 1.75 

 

Say you want to calculate the cost of the owner's title policy for a $150,000 property. The total cost will be 

    (50000/1000) x $4.00

+  (50000/1000) x $3.75

+  (50000/1000) x $3.25 

_____________________

= $550

How much do the owner's policy and Lender’s policy cost in Minnesota?

  • For a purchase price of a $300,000 property in Minnesota with a 20% down payment ($60,000), the cost of title insurance policy and lender's policy are $912.5 and $75 respectively. 
  • For a purchase price of a $300,000 property in Minnesota bought with full cash, the cost of the title insurance owner's policy is $912.5. 
  • For a purchase price of a $500,000 property in Minnesota with a 20% down payment ($100,000), the cost of the title insurance owner's policy and lender's policy are $1,362.5 and $75 respectively.
  • For a purchase price of a $500,000 property in Minnesota bought with full cash, the cost of the title insurance owner's policy is $1,900. 
  • For a purchase price of a $1,000,000 property in Minnesota with a 20% downpayment ($200,000), the cost of the title insurance owner's policy and lender's policy are $2,362.5 and $75 respectively. 
  • For a purchase price of a $1,000,000 property in Minnesota bought with full cash, the cost of the title insurance owner's policy is $2,362.5  

What is the Owner's Title policy in Minnesota?

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 Minnesota?

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 Minnesota?

Title insurance may not cover the following:

  • Losses due to infestation
  • Financial losses due to repair and maintenance of items that were not revealed during the property inspection.
  • Damages due to natural calamities such as thunderstorms.
  • Damage due to a fire

How long is the title policy valid in Minnesota?

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 prices in Minnesota?

The Minnesota Department of Commerce is responsible for regulating title insurance in the state of Minnesota. The department is responsible for the title companies to operate in accordance with the Minnesota law and policy provisions wherever applicable. 

Who pays for Title Insurance in Minnesota?

Title insurance fees can be paid by either of the parties. In many areas, the seller pays for the owner’s policy but overall it really depends on the agreement between the buyer and the seller in Minnesota. 

Is Title insurance required in Minnesota?

According to the office of the Minnesota Attorney General, it appears that the lender's policy is necessary to buy in order to protect the lender from hidden title defects. However, it also states that the Owner's policy may also be purchased as the lender’s policy only protects the lender and not the buyer. 

As a general rule of thumb, it is always best to go for title insurance irrespective of the fact that it is mandated by the state or not.

Should you shop for title insurance in Minnesota?

You can definitely shop for title insurance in the state of Minnesota 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 Minnesota?

Technically there is no discount on title insurance in Minnesota. But what you can do is go for simultaneous issuing of both Owner’s Policy and Lender’s Policy at the same time. This way you only pay a fixed amount of $75 for the Lender’s Policy.