On August 1, 2024, new Minnesota legislation that addresses insurance coverage on real estate subject to a Transfer on Death Deed (TODD), will take effect.  A Transfer on Death Deed is a deed that beneficiary-designates an interest in real estate and is effective upon the death of the property owner.

This new law is a product of a 2019 federal district court case, Strope-Robinson v. State Farm Fire and Cas. Co.  (429 F. Supp. 3d 634 (D. Minn. 2019), aff’d by 844 Fed. Appx. 929 (8th Cir. 2021)).  In the Strope-Robinson case, the property owner conveyed a house to a beneficiary via a TODD, the property owner died, and then the house burned down.  State Farm denied the beneficiary’s claim for coverage because the policy was the property owner’s, and not the beneficiary’s. The court ruled that State Farm was not responsible for covering the damage to the dwelling.

The new law extends temporary insurance coverage under the property owner’s policy to TODD beneficiaries under certain circumstances, where: 1) the property owner provides proper notice to the insurer of the existence of the TODD and the names and contact information of all beneficiaries; 2) the property owner gives the name and contact information of the insurer to the beneficiaries; and 3) required proofs are provided by the beneficiaries to the insurance company.  The beneficiaries’ temporary coverage terminates the soonest of: 1) 30 days after the property owner’s death, 2) when the property owner’s policy expires, or 3) when the beneficiary purchases a replacement policy.