Whether you’re buying or selling a home, you may have heard the term “title insurance” used. Title insurance has been a part of property transfers in the United States for more than a century. Title insurance helps to make sure that the sale of a home or property from one party to another goes smoothly.


What most people don’t realize when they begin the process of closing is that there are actually two types of title insurance. Both are equally important when it comes to protecting your investment. That’s why our team of title closers at Liberty Title in Minnesota are here to offer everything you need to know about the two types of title insurance.


How Title Insurance Works

At its most basic, title insurance protects everyone involved ina sale from loss of money and investment due to a title defect. Title problems can even cause a property owner to lose their claim to a title or property. Unfortunately, title defects are much more common than most people realize.


Here are some common title problems:

●        Easements

●        Missing heirs

●        Errors on the title

●        Inaccurate names

●        Fraud


Court Problems and Property Loss

If a title problem were to arise down the road after the purchase of a home, the property owner’s rights may be threatened. A best-case scenario can often include extensive court time and costs. Title insurance protects you against past events that affect the title. With title insurance, an abstractor will perform a title search and an examiner will examine those public records found by the abstractor looking for errors so there are no surprises.


There are two types of title insurance:


1.      Lender’s insurance - This insurance must be purchased for every sale by the buyer. The lender’s title insurance policy is paid for as part of a buyer’s closing costs and protects the lender if any title issues arise after closing.


2.      Owners insurance - Like lender’s insurance, owners insurance protects against title issues. Owners insurance protects the buyer in case anything goes wrong that could threaten their claim to the home after closing.


Minnesota Buyer’s and Seller’s Title Insurance Protection

Whether you’re the seller or the buyer, you need to protect your investment. Although our abstractors are the best at what they do, occasionally the unforeseen can happen down the road.


That’s why it’s important to select owners insurance along with your lender’s insurance. To find out more about title insurance, call us at 763.494.0340, or contact us and find out how we can help you with your title closing.