What is Title Insurance?

You're entitled to know more about title insurance in Minnesota

When it comes to real estate transactions, it's important to answer the question "what is title insurance?"  Whether you are a lender, real estate agent or buyer, our handy General FAQs can help you understand your title insurance needs.  

Title Insurance Calculator and Why You Need Title Insurance in Minnesota


The term "title insurance" and the requirement of title insurance for real estate transactions began as a way to protect all parties in real estate transactions. The U.S. is one of many countries where the land records are not perfectly documented. Title disputes can arise when property is transferred from one hand to another.  Due to the element of risk involved during the transfer of titles, today's title companies provide title insurance to give you peace of mind in all real estate transactions. You can get started with our title insurance calculator

What is the history behind title insurance?

This concept of title insurance came into effect in 1876. Prior to this period, it was the prime responsibility of the buyer to ensure that prior to the home purchase, the title of the land was in the name of the seller. If the title was proved to be defective later on, the buyer would lose the investment. Title insurance was created as a result of a court case in 1868 more famously known as the Watson v. Muirhead case. Watson was the purchaser of the property and Muirhead was the seller. There had been a lien on the property but Muirhead did not disclose this fact to the buyer as his lawyer had informed him that the lien was invalid. The court decided that the purchaser should not suffer on account of professional mistakes and this gave birth to the concept of the first title insurance company in the world.

How is title insurance different from other types of insurance?

a)    Traditional insurance covers any loss on occurrence of events in the future whereas title insurance covers actions of the past.

b)   In traditional insurance,  the premiums are calculated on an actuarial basis whereas in title insurance the majority of the premium is used as protection to correct the anomalies in the title, if any.


Why is the search of the land records done after the transaction of sale is over?

This is because the land records are not perfectly documented and a property buyer might not have access to these records before buying the property. By taking a title insurance policy, he or she hedges the risk and transfers it to the title company. The title company conducts a property search in order to ensure protection for the lender and the owner.