Buying a home in Bozeman comes with big emotions and even bigger decisions. One line item that often raises questions is title insurance. You want to be sure your ownership is solid and your equity is protected, without paying for something you do not need. In this guide, you will learn what title insurance covers in Montana, how an owner’s policy differs from a lender’s policy, what to expect on costs, how the title commitment works in Gallatin County, and the local risks to watch. Let’s dive in.
Title insurance basics
Title insurance protects you from financial loss caused by defects in the property’s title that existed before closing but were not known at that time. You pay a one-time premium at closing. If you buy an owner’s policy, coverage generally lasts as long as you or your heirs have an interest in the property.
Typical covered risks include:
- Forged or fraudulent deeds or mortgages in the chain of title.
- Clerical or recording errors, such as an incorrect legal description.
- Undisclosed heirs or missing signatures that affect ownership.
- Unpaid liens that were not found before closing, like judgments or some contractor liens.
Common exclusions usually include:
- Zoning, building code issues, or most future government actions.
- Problems visible by inspection, such as some boundary disputes, unless you add an endorsement.
- Environmental contamination.
- Rights or claims of people in possession not shown in public records.
- Matters created after the policy date. An owner’s policy protects against pre-existing defects only.
You can add endorsements to expand coverage. Examples include survey-related coverage, access or right-of-way endorsements, building permit coverage, and endorsements addressing severed mineral interests. Lenders often require certain endorsements. You can add owner endorsements to fit your risk profile.
Owner vs. lender policies
Lender’s policy
A lender’s policy protects the lender’s interest in the property, up to the loan amount. It is almost always required when you finance a home. The policy ends when you pay off or refinance the loan. You pay the premium at closing.
Owner’s policy
An owner’s policy protects your equity and ownership rights, typically up to the full purchase price or the insured amount. It is optional but recommended, especially for rural parcels or older homes where property histories can be complex. The premium is paid once at closing, and coverage lasts as long as you or your heirs have an interest in the property.
Why it matters in Bozeman
If you use a mortgage, you will see a lender’s policy on your closing documents. That policy protects the lender, not you. Without an owner’s policy, your options for dealing with title defects may be limited to legal action or any indemnity the seller offered. In a place with rural acreage, historic plats, and evolving subdivisions, an owner’s policy is a practical way to protect your equity and future sale proceeds.
What you will pay in Montana
Title insurance premiums are set by the insured amount, the type of policy, endorsements, and local rate practices. In general, an owner’s policy is a one-time cost that is a small percentage of the purchase price, while a lender’s policy is usually lower because it insures only the loan amount. Exact premiums depend on current rate schedules and endorsements and will be confirmed by the title company.
Who pays is negotiated in your purchase agreement and can vary by local custom. In Bozeman and across Gallatin County, some sellers cover the owner’s policy, some buyers do, and sometimes costs are split. Confirm the arrangement in your contract and ask your agent or the title company what is typical for your situation.
You will see title insurance and related title and escrow fees on your Closing Disclosure. Your lender must disclose the lender’s policy cost and any owner’s policy you elect to purchase.
How the title commitment works here
A preliminary title commitment is the title company’s written promise to issue a policy after closing if certain conditions are met. It follows a title search of public records and is organized in familiar parts:
- Schedule A: Basic details like the proposed insured, legal description, and insured amounts.
- Schedule B Part I: Requirements that must be satisfied before the policy will be issued, such as paying off the seller’s mortgage.
- Schedule B Part II: Exceptions that will not be covered unless cleared or insured by endorsement.
Where the search happens in Gallatin County
Title companies review records at the Gallatin County Clerk & Recorder, check county tax records, and search state and federal lien indexes when needed. For rural or Montana-specific concerns, examiners may also review recorded mineral reservations, water right documents, easements and access, and plats or covenants tied to subdivisions.
Timing and expectations
A preliminary commitment is often ready within several business days to a couple of weeks after the title company is engaged and receives your contract. Complex or rural chains of title can take longer. Respond quickly to any requests, and review the commitment early in your inspection period to avoid delays.
Handling exceptions
Requirements in Schedule B Part I must be handled before closing. For example, the seller’s mortgage may need a recorded release. Exceptions in Schedule B Part II remain excluded unless the title company removes them through corrective recordings or insures around them with an endorsement. Some exceptions are routine and stay on title, like utility easements. Others, like unresolved liens, usually must be cleared or bonded off before you close.
Local Bozeman risks to watch
Bozeman and the broader Gallatin Valley include both in-town neighborhoods and rural parcels. Title commitments in this region often surface items you should understand before you close:
- Easements and rights-of-way for utilities or access that affect use or building plans.
- Access questions on rural roads and driveways, including county road rights or private road agreements.
- Boundary or survey issues tied to old plats or ambiguous legal descriptions.
- Unreleased prior mortgages, judgment liens, tax liens, or contractor liens.
- Mineral rights that may have been severed from surface rights, which can limit coverage unless endorsed.
- Water rights and irrigation easements that are recorded and can affect use. Title reports may show documents, but they do not guarantee water availability or quantity.
- Restrictive covenants, HOA rules, and subdivision conditions that shape what you can build or do with the property.
Endorsements to consider
Your need for endorsements depends on the property and your risk tolerance. Ask the title officer and your agent which options fit your situation.
- Survey or ALTA survey endorsement for coverage tied to boundary or encroachment issues shown on a current survey.
- Access endorsement to insure against a lack of legal access.
- Minerals endorsement to address severed mineral estates if available.
- Building permit or zoning-related endorsements for specific risks when offered.
Your Bozeman closing checklist
Use this step-by-step list to keep title tasks on track.
Before or at contract
- Ask which title company will handle the file and request that the search starts right away.
- Confirm who pays for the owner’s policy in your purchase agreement.
- Make sure your full legal name is accurate for vesting and loan documents.
During escrow and inspections
- Read the preliminary title commitment with your agent or a real estate attorney.
- Check Schedule A for the legal description and vesting details.
- Review Schedule B Part I for payoff, release, or documentation requirements.
- Study Schedule B Part II exceptions, especially easements, covenants, mineral reservations, and any water-right documents.
- Ask if a current survey or ALTA/NSPS survey is required or recommended.
- Discuss endorsements that match your property risks, such as survey or access.
Before closing
- Confirm premium amounts and title-related fees that will appear on the Closing Disclosure.
- Verify that the title company has written payoff statements and will record releases.
- If an exception cannot be cleared, decide whether to proceed with an endorsement or accept the exception and understand the risk.
After closing
- Store the owner’s title policy in a safe place. You will need it if you ever make a claim.
- Remember that an owner’s policy typically protects you and your heirs as long as you retain an interest in the property.
Working with a trusted local guide
Title insurance is one piece of a larger purchase plan. In Bozeman and across the Gallatin Valley, local context matters for things like access, water use, and historic plats. A careful read of the title commitment, the right endorsements, and timely coordination with the title officer help you close with confidence.
As a Montana native with construction and development experience, Carissa helps you spot practical issues early and coordinate with the title and escrow team so your closing is smooth. If you are planning a move within Bozeman, relocating to the Gallatin Valley, or buying land to build, you will get clear guidance at every step.
Ready to talk through your next purchase and review what to expect on title in Bozeman? Schedule a time with Carissa Maus (Paulson) to get a plan tailored to your property and goals.
FAQs
Do Bozeman buyers need an owner’s title policy?
- Yes. A lender’s policy protects the lender only. An owner’s policy protects your equity and ownership rights for as long as you or your heirs have an interest in the property.
How much does title insurance add to Bozeman closing costs?
- It is a one-time premium based on the insured amount and endorsements. Exact numbers depend on current rate schedules and will appear on your Closing Disclosure.
Who pays for title insurance in Bozeman, Montana?
- Payment is negotiated in the purchase agreement and shaped by local custom. Confirm the arrangement in your contract and ask the title company or your agent what is typical.
How long does a Gallatin County title search take?
- Often several business days to a couple of weeks after the title company is engaged. Complex or rural properties can take longer, so start early.
What if the title report shows problems before closing?
- The title company lists requirements to clear issues, such as lien payoffs or corrective recordings. Some items can be removed or insured with endorsements, while others must be resolved before you close.
