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Why is Owner's Title Insurance Important?
Are you currently buying or selling a home? Have you have ever purchased or sold a home? If so you have probably considered owner's title insurance. There are a lot of questions people have regarding this insurance policy, but among the greatest is, "Do I really need this?" This is a completely reasonable question. No one wants to pay for something unnecessary.
At its most basic level, owner's title insurance protects a property owner from the consequences of a claim on the title of the property. Most people assume this means that you are protecting yourself from someone approaching you and saying, "Hey, this is my house!" And although that is true, if that were the primary case, this would seem rather silly because that is such an outlandish thought. A claim would likely appear in a different form. Most claims are almost completely out of the purchaser's control.
For example, human error is an ever present risk. Of course, businesses strive to do their best, but we are human and we err. From the surveyor's measurements of the property to the title search to the recording of liens, there is room for mistake. And of course, there is always a possibility of fraud. Has someone intentionally not conveyed their marital interest? Have IDs been forged? Subject to certain limitations, owner's title insurance protects homeowners from these types of risks.
It is also important to note that if there is a title issue, you will probably not be able to sell your property until that issue is resolved. If you do not have title insurance, you will have to resolve that problem out-of-pocket.
Keep in mind that even though your lender obtained a lender's title insurance policy at closing, that does not mean that you are covered. A lender's policy only covers the lender.
Owner's title insurance is a one-time payment at closing and one of the cheapest types of insurance you will find. Because of the broad protection that it supplies, we recommend all property owners obtain owner's title insurance.
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