7 REASONS TO PURCHASE TITLE INSURANCE
YOUR LENDER'S TITLE INSURANCE DOES NOT PROTECT YOU
Your lender will make you purchase a title insurance policy that covers the lender up to the outstanding balance of your loan. As you pay off your loan, the maximum coverage goes down. Once the loan is paid off, the lender's policy expires. If you have a problem with your home title, you will be left to protect your own interests out of your own pocket. A title issue may cause you to lose your home and any equity you have in it. Without coverage you are not protected like you should be.
2. A THOROUGH TITLE SEARCH
A title examiner will thoroughly examine the public land and tax records before you purchase the property to determine ownership of the property and to uncover deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, encumbrances, bail bonds, and plats of survey associated with your potential property. This search will help uncover title problems before you buy.
3. PROTECTION FROM UNFORESEEN DEFECTS
Even after a thorough title search, there is still potential for unforeseen title title problems to pop up long after you’ve purchased your new home. Owners Title insurance will protect you from undisclosed or secret:
Liens that are the result of a prior owner’s actions which can be placed against the property by a contractor, tax authority or lender who hasn’t been paid.
Easements or a third party’s right to use or access your property even though you are the owner. Say a utility or sewer line runs through your backyard—if so, the utility or sanitation company will have an easement allowing them to access your property. The easement could also prohibit you from using your property however you want, such as building a garage or adding a pool.
Encumbrances or other forms of claims against the property, which can include restrictive covenants imposed by homeowners’ associations or leaseholder rights.
Outstanding debt from the previous owner, such as mortgages, judgments, unpaid child support or unpaid taxes.
Conflicting wills or an undisclosed/unknown heir of a previous owner suddenly claiming ownership.
4. PROTECTION FROM UNFORESEEN RISKS OR CLAIMS
If the seller of your property lied about his ownership or if deeds or ownership documents are discovered after your purchase, Owners title insurance will protect you from certain covered risks up to the amount of your insurance coverage, including a defect in title caused by:
Forgery of documents
Fraud or impersonation of the property’s true owners
Clerical errors that result in a document not being properly filed, recorded, or indexed in the public records
5. PROTECTION IN COURT
If someone sues you for a covered defect, your title insurance underwriter will protect your financial interests, defend you in court and settle any covered claims for you.
6. A LOW ONE-TIME PAYMENT
Unlike most insurance policies that have monthly premiums, owner’s title insurance requires a one-time fee at closing. Costing only about 0.5% to 1.0% of the property’s purchase price (about $1,500-$3,000 for a $300,000 home), this one-time fee will protect you from covered risks for as long as you or your heirs own the property. Check out Old Republic Title’s Rate Calculator to learn more about rates in your area.
7. PEACE OF MIND
According to the American Land Title Association, a third of title searches reveals a defect or third-party claim. While most of these unforeseen problems can be fixed, they can effect your property rights and create expensive title disputes. Protecting your property rights with both lender’s and owner’s title insurance will give you peace of mind that your home is safely insured.
Ultimately, while most forms of insurance protect you from what might happen in the future, title insurance protects you from things that may have already happened in the past but are hidden, undisclosed or unknown.