As one of the Twin Cities most trusted title companies, we work hard to help our clients understand why title insurance is important, and answer all of their questions about the home closing process.

One of the most common questions we receive relates to why title insurance is so critical: what does title insurance protect you from?

Title insurance keeps both the property owner and the lender protected from losses or damages that can occur with property liens, encumbrances, or issues that arise with the title or ownership of a property.

Doesn’t my homeowner’s policy cover this?

Traditional insurance, like homeowner’s insurance, protects you from many things – but all of those things are potential future events. Title insurance works the opposite way – it protects you against claims for past occurrences.

I don’t have “past occurrences” to worry about. Do I still need title insurance?

Title insurance protects you and your mortgage company from any of the previous homeowner’s transgressions that may have led to property liens, encumbrances or other issues. This keeps you protected if they did not have free and clear ownership of the property you are purchasing.

What happens if I don’t get title insurance?

While the likelihood that you will need to use your title insurance is low, having the insurance protects you from many situations that could cause you to lose significant amounts of money – or possibly the property itself.

For example, if you’re purchasing your property from a single man, who doesn’t realize that his ex-wife still co-owns the property and needs to sign off on the sale, you could find yourself in a legal battle down the road. Or if there’s a lien from an old repair bill on the house, you could be assuming the payments for that lien with the purchase of the property. Title insurance keeps you protected from things like this.

I didn’t realize there were so many facets to title insurance. How can I make sure I’m protected?

Work with a title company that’s been around for a long time, secure in the marketplace, and knowledgeable about the area where you’re buying property. Choosing a local, experienced title company is a great place to start.

Ready to learn more? Let’s chat: