Sandra is purchasing a home in Olmsted County, Minnesota. Her real estate agent recommends she obtain an owner's title insurance policy at closing. Sandra asks why this matters if the title has already been searched. Which of the following best explains the primary purpose of an owner's title insurance policy in a Minnesota transaction?

Correct Answer

D) It protects the buyer against losses from title defects that may not appear in public records

An owner's title insurance policy protects the buyer against financial losses arising from title defects that may not be discoverable through a public records search — such as forged documents, undisclosed heirs, errors in public records, or fraud. In Minnesota, even a thorough title search cannot reveal all possible defects. The owner's policy provides protection for as long as the insured or their heirs hold an interest in the property.