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Get an Owner’s Policy to Protect Your Investment

An owner’s policy is typically issued in the amount of the real estate purchase and lasts as long as the insured person – or his/her heir(s) – owns the property. Keep in mind, a loan policy does not offer you, the owner, any protection. It only offers protection to the lender to protect their lien rights. Title insurance offers financial protection against many items including: tax liens, forged signatures, chain of title recording errors, title search errors, and claims by missing heirs and/or ex spouses. An owner’s policy protects you against the potential loss of your most valuable material asset – your home.

Cost of Title Insurance

Unlike some insurance policies, title insurance is a one-time fee. As an example, the cost for an owner’s policy for a home in Minneapolis, Minnesota that is listed at $350,000, assuming a 10 percent down payment, is around $280. Over the average duration of home ownership, that spreads out to about $23 annually or about $2 per month.

In Minnesota, title underwriters are required to file their title insurance rates with the state insurance departments. When shopping around for rates, be sure to ask who underwrites the policy. Choose one that has high reserves for claims and has been in the industry for more than a decade. “Strength” and “stability” are words you want to hear.

Get Peace of Mind with Homeowner’s Title Insurance Policy

There are two types of owner’s title insurance policies certified by the American Land Title Association: the Owner’s Policy and the Homeowner’s Policy. The Owner’s Policy protects you from defects and liens in the history of your title through the date and time your deed is recorded in the public records. The Homeowner’s Policy takes your protection to a higher level by providing coverage for many additional risks, including some that might occur after the deed has been recorded. Click to download the Comparison Chart of the two types of policies in PDF.** The Homeowner’s Policy protects against many common and frustrating problems. It also protects your investment for as long as you or your heirs own the property. Read on for a description of some of the additional coverages you’ll receive when you upgrade to a Homeowner’s Policy.
**The comparison attached represents Stewart Title and is subject to change based on the Underwriter selected.
Pays up to $10,000 after a deductible equal to the lesser of 1 percent of the policy amount, or $2,500. This coverage applies if you cannot close a sale, secure a loan or obtain a building permit because the land was improperly subdivided prior to purchase.
Ensures that the home has the same address as the property insured in the policy.
Protects against loss of title if someone attempts to enforce an existing restrictive covenant due to a violation that occurred before the policy date.
Protects if you are forced to remove or remedy a structure because it violates zoning laws. Protection for forced remedy of violations is subject to a deductible and a maximum dollar amount.
Protects against possible post-policy ownership claims as a result of forgery or encroachment.
Covers actual pedestrian and vehicular access to the property.
Protects against someone building a structure (excluding boundary walls and fences) that encroaches on the insured property.
Protects against supplemental taxes for construction, change of use or ownership.
Protects all existing structures and landscaping (including future replacements) on the property, against damage caused by others using the land for extraction and development of minerals, water and other substances.
Each of the first five years, the policy amount will automatically increase by 10 percent in value, up to a total of 150 percent, to cover increases in the value of the insured property.
Extends policy protection to include a trust you create.
Covers up to $25,000 after a deductible equal to the lesser of 1 percent of the policy amount, or $5,000. This coverage applies if you have to remove an existing structure (excluding boundary walls and fences)
 built by a previous owner who did not obtain the required permits.

Living Trust Coverage Extends policy protection to include a trust you create. Contact us for more information about title insurance and to learn more about our company.