In Michigan, the seller customarily pays for the owner’s title insurance policy that protects the buyer, and the buyer pays for the lender’s policy required by the mortgage company. That is the usual answer to who pays for title insurance in Michigan, but it is custom, not law. No Michigan statute assigns the cost to either side, so the purchase agreement controls, and either party can agree to pick up the other’s share as part of the deal.1Michigan Department of Insurance and Financial Services. Title Insurance
The Customary Split and What Each Policy Does
Two separate title insurance policies are typically issued at a Michigan closing, and the custom treats them as two separate bills.
The seller pays for the owner’s policy. This policy protects you, the buyer, against title problems that predate your purchase but surface later: an unknown lien, a forged deed somewhere in the chain of title, a missing heir who turns up with a claim to the property. The seller delivering clean title has traditionally been treated as the seller’s responsibility, which is why the cost sits on their side of the ledger.
The buyer pays for the lender’s policy. This one protects only the mortgage lender’s interest in the property, and the lender almost always requires it as a condition of the loan. Because the policy exists to satisfy the buyer’s financing, the buyer pays for it.
Michigan’s Insurance Code defines title insurance and regulates the companies that issue it, but it does not say who has to pay the premium.2Michigan Legislature. MCL Section 500.7301 The customary seller-pays-owner, buyer-pays-lender split is a default starting point and nothing more.1Michigan Department of Insurance and Financial Services. Title Insurance
What the Premiums Actually Cost
Title insurance is a one-time premium paid at closing. There are no monthly bills and no renewals. The amount comes from a filed rate schedule based on the sale price for the owner’s policy and the loan amount for the lender’s policy. Michigan’s residential rate structure for the owner’s policy is tiered:3Stewart Title Guaranty Company. Schedule of Charges for Title Insurance in the State of Michigan
- First $20,000 of coverage: $500 flat
- $20,001 to $100,000: add $6.70 per $1,000
- $100,001 to $200,000: add $5.35 per $1,000
- $200,001 to $300,000: add $4.55 per $1,000
- $300,001 to $1,000,000: add $3.48 per $1,000
On a home at Michigan’s median sale price of roughly $254,000 in late 2025, the owner’s policy premium works out to about $1,820: $500 for the first $20,000, around $536 for the next $80,000, $535 for the next $100,000, and roughly $247 for the remaining $54,000. Rates can vary by title company, but the filed schedule gives you a dependable number to plan around. Knowing the dollar figure matters because that is the amount you and the other party are negotiating over.
Negotiating the Split in the Purchase Agreement
Because the law does not assign these costs, your purchase agreement is where the split is actually decided. Address title insurance in writing during the offer stage; do not assume the custom will apply by default.
Leverage shifts with the market. In a tight seller’s market, a buyer might offer to pick up the owner’s policy to sharpen a competitive bid. In a slower market, a seller might offer to cover all title charges to move the property. Whatever the two sides agree to, the purchase agreement needs to spell it out plainly so the title company applies the right credits and charges on the settlement statement. Vague language here is how buyers end up paying for something they thought the seller was handling.
One boundary worth naming: these are the two title insurance premiums, not every closing cost. Transfer taxes, recording fees, and lender charges have their own customary allocations and their own line items. Agreeing on title insurance does not settle those.
Ways to Pay Less No Matter Who’s Writing the Check
Shop for Your Title Company
Federal law protects your right to choose. Under the Real Estate Settlement Procedures Act, a seller using a federally related mortgage loan cannot require the buyer to buy title insurance from any particular company. A seller who violates this rule owes the buyer three times the title insurance charges.4Office of the Law Revision Counsel. 12 USC 2608 – Title Companies Liability of Seller
Your lender has to give you a list of title companies that provide services you can shop for, and you can propose a company that is not on the list if the lender agrees. Comparing quotes pays off. The Consumer Financial Protection Bureau estimates borrowers who shop around could save as much as $500 on title services.5Consumer Financial Protection Bureau. Shop for Title Insurance and Other Closing Services
Simultaneous Issue Discount
When the owner’s and lender’s policies are issued at the same time, which is what happens in nearly every purchase transaction involving a mortgage, Michigan rate manuals apply a steeply reduced rate to the second policy. The discount is usually automatic, but confirm with your title company that the simultaneous issue rate appears on your settlement statement. If it does not, ask why.
Reissue Credit
If the seller bought an owner’s title policy on the same property within the last five years and can produce a copy, the buyer may qualify for a reissue credit that lowers the premium on the new policy. The exact discount varies by title company. Sellers do not always have the old policy at hand, so ask early in the transaction while there is still time to track it down.
How the Payment Shows Up at Closing
Both premiums are itemized on the Closing Disclosure, with the owner’s policy, the lender’s policy, and any related fees listed as separate line items showing which party owes what based on the purchase agreement.6Consumer Financial Protection Bureau. Title Insurance Disclosures Fact Sheet Review these lines before closing day. If the split does not match what the purchase agreement says, raise it with your agent and the title company before you sign.
Payment itself happens at the closing table. The responsible party funds their share by cashier’s check or wire transfer into the title company’s escrow account, and the title company disburses the premiums once the documents are signed and the sale conditions are satisfied. Your final policy is usually mailed to you several weeks after the deed is recorded with the county register of deeds.