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What is title insurance?

Title insurance protects you against hidden hazards and human error that can cause problems in any real estate transaction. When you purchase title insurance, experienced title examiners perform a thorough title search by combing through all available public records, but there's always a chance that substantial problems may go undetected.

Your property is pledged as security for your mortgage loan, so your lender protects its interest through a lender's title insurance policy. However, this policy doesn't cover you.

How it Works:

There are two types of title insurance: a lender's policy and an owner's policy.

The lender's policy protects the lender's interest in the property for the amount of the mortgage loan. Lender policy coverage lasts until the mortgage is paid in full.

An owner's policy protects the homebuyer for the full property value. An owner's policy remains in force as long as you or your heirs have an interest in the property. If challenges to title arise after the property has passed to your heirs, the title insurance company would defend the title for them just as it would for you.

While a lender's policy if often required to grant a mortgage loan, an owner's policy is typically optional.

What does an owner's policy cover?

An owner's policy protects your interest in the property against such hidden hazards as:

  • Mistakes in recording of legal documents.
  • Forged deeds, releases, or wills.
  • Liens for unpaid taxes.
  • Fraud.
  • Deeds by minors.
  • Undisclosed or missing heirs, including spouses.
  • The right to solely own the property.
  • Boundary issues.
  • Disputes and encroachments.
  • Judgments attached to the property from previous owners.
  • Legal fees in defense of a claim against your property.

For a one-time premium you pay during the closing process, your title insurer assumes responsibility for all legal expenses to defend the title to your property if it's ever challenged. It the defense is unsuccessful, you're reimbursed for any reduction in the value of the land.

Before buying real estate, give our office a call. Ask how simple it is to fully protect yourself against title loss.

Excelsior Title - Excelsior, MN 55331 USA | 612.859.4043

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