How Important is Title Insurance?

How Important is Title Insurance?

Suppose you purchase your dream house and when you arrive in your overloaded moving van, only to find someone else in the house claiming ownership.  What would you do?  Or suppose you are awakened early one morning by a construction crew preparing to bulldoze your entire front yard for a railroad track to be built on an easement claimed to pass through your yard.  What happens now?  What if you received a notice of past due property taxes which must be paid within a few days or the property will be put up for sale?  An Owner's Policy of Title Insurance is designed to prevent these problems from ever happening, and give you a source of protection if something unforeseen does occur.

Title Insurance is the only guaranteed protection against real estate title losses.  It insures your ownership of your home.  Your lender will require Lender's Title Insurance, but that only protects their interest.  It insures the lender for the original amount of the loan against invalidity of the mortgage which secures the loan.

The Owner's Policy of Title Insurance protects you.  It informs you of any other interest in the property, such as liens and encumbrances, and protects you against unknown claims of ownership to your interests in your property.

Most people have fire, car, and life insurance.  You pay premiums every year to continue your protection.  When you purchase an Owner's Title Insurance Policy, you pay your premium only once for coverage that will protect your initial investment for as long as you own your home.

Title insurance protects you from hidden risks not revealed by an examination of the public records.  Common examples of hidden risks include:

  • Forgery or Fraud
  • Missed Taxes
  • Undisclosed or missing heirs
  • Incorrect legal descriptions
  • Conveyance by a minor
  • Incorrect indexing at the courthouse
  • Mental incompetence of grantors
  • Missed easements