Buying a home is an exciting time. You search hard to find the perfect home that meets all of your expectations. When you finally find the right place that’s perfect for your family, you’re completely relieved and elated. You can also feel a little bit overwhelmed with the process, especially with all of the terms that arise along the way.


One of the most confusing matters to anyone who is new to home purchasing is the title insurance policy process. You may hear the terms “owner’s policy” and “loan policy” used by your broker but not be quite sure what they mean or which you need to purchase.


Our experts at Liberty Title in Minnesota offer both owner’s and loan title insurance policies, and here’s what you need to know about purchasing both of these options.


What is Title Insurance?

Title insurance is a unique kind of title insurance because it protects home buyers and sellers from things that have already happened. Whereas a home insurance policy or car insurance policy protects you from something unexpected that could happen down the road, title insurance protects you from the past.


Before title insurance was common, land owners would sometimes learn years after taking ownership that there was a serious legal dispute with the deed of a home or property. For example, the person who sold the land did not have the authority to sell it. Or perhaps a mistake was made when the deed was filed that has resulted in a dispute over the boundaries of the property. For land owners who got stuck with these problems, their ownership of a property was at stake, and they had very little legal recourse to protect themselves.


Protection from Court Costs and Property Loss

In those days, a land or homeowner could easily end up in court. Not only would the new owner end up getting hit with sizeable court costs, but they also often lost their property or the amount of money invested in a down payment. Fortunately, title insurance was invented to protect property owners from such occurrences. When a problem with a title arises, title insurance covers legal fees and any investment losses that might occur.


Title insurance protects owners and buyers from many problems:


●        Missing heirs

●        Title mistakes

●        Fraud

●        Tax Liens

●        Mechanic’s Liens

●        Will errors

●        And more


Loan Insurance Versus Owner’s Insurance

There are two main types of title insurance, and determining which one you need can be a little confusing. Loan insurance is required for all home purchases and protects the loan company’s investment.


Owner’s insurance, on the other hand, protects the buyer of a home. That means if you learn in two years that a mistake in the filing of a previous owner’s will took place and someone places a claim, you’ll be protected. Both types of insurance are equally important and can be added to the closing costs during a home purchase.


Minnesota Buyer Title Insurance Protection

You’ve worked hard and saved for the home you’ve been dreaming of. Don’t take a risk with your investment. If you’re in the process of purchasing a new home, our title insurance agents can help you keep your hard-earned savings safe. That way you can worry about more important things like where to put the big-screen television in your living room.


Speak with our agents to purchase your title insurance at 763.494.0340, or contact us to find out more about how title insurance protects homeowners.