Why you need title insurance…
When you purchase your home, how can you be sure that there are no problems with the home’s title and that the seller really owns the property? Problems with the title can limit your use and enjoyment of the property, as well as bring financial loss. Your house may be new but the dirt beneath it is very old.
The Title Search
After your sales contract has been accepted, a title professional will search the public records to look for any problems with the properties title. This search typically involves a review of land records going back many years. More than 1/3 of all title searches reveal a title problem that title professionals fix before you go to closing. For instance, a previous owner may have had minor construction done on the property, but never fully paid the contractor. Or the previous owner may have failed to pay local or state taxes. Other common title problems include (but aren’t limited to) unreleased mortgages, improperly executed documents, probate and estate matters.
The Owner’s Title Policy
Title problems sometimes occur that could not be found in the public records or are inadvertently missed in the title search process. To further protect you in these events, it is recommended that you obtain an Owner’s Policy of Title Insurance to insure you against the most unforeseen problems.
Owner’s Title Insurance (often called an Owner’s Policy) is normally issued in the amount of the real estate purchase. It is a one-time fee at closing and lasts for as long as you or your heirs have an interest in the property. Only an Owner’s Policy fully protects the buyer should a covered title problem arise that was not identified during the title search. Possible hidden title problems can include:
- Errors or omissions in deeds
- Mistakes in examining records
- Forgery & Fraud
- Undisclosed heirs
An Owner’s Policy provides assurance that your title insurance company will stand behind you monetarily and with legal defense in the event a covered title problem arises after you buy your home. The bottom line is that your title insurance company will be there to help pay valid claims and cover the costs of defending an attack on your title. Receiving an Owner’s Policy isn’t always an automatic part of the closing process, and is paid for by different people in different parts of the country. Be sure you request an Owner’s Policy and ask how it is paid for where you live. No matter who pays for the Owner’s Policy, the fee is one-time and paid at closing. Again, the Owner’s Policy protects you for as long as you or your heirs have an interest in the property.
You also have the option of purchasing a policy with expanded coverage. It’s called the Homeowner’s Policy and it offers greater protection than the standard Owners Policy. Please ask one of our licensed agents for an explanation of the expanded Homeowner’s Policy so you can decide which policy is the best one for you.
For more information on title insurance please reference the brochures below.
| Homeowner Policy of Title Insurance Brochure 1992 ALTA Policy (PDF) |
| Homeowner Policy of Title Insurance Brochure 2006 ALTA Policy (PDF) |