Understanding Owner’s Title Insurance

When you start your home-buying journey, you may have to purchase several things you weren’t thinking about when saving up for your down payment. One of the most important but least understood is owner’s title insurance.

Owner’s title insurance is a form of insurance that provides protection to homebuyers in the event of problems with the title of the property they are purchasing. While it’s typically an optional purchase, there are several benefits to having owner’s title insurance during the home-buying process:

1. Title Protection: Owner’s title insurance protects you, the homebuyer, against financial loss or legal disputes related to the title of your property. This can include issues like undisclosed liens, forged deeds, errors in public records, or other title defects.
2. Peace of Mind: Having owner’s title insurance provides peace of mind to homeowners. It can help ensure that you are the rightful owner of the property and that there are no unexpected claims against your ownership.
3. Financial Security: If a title issue arises, the cost of defending your ownership and resolving the issue can be substantial. Owner’s title insurance can cover these expenses, which may include legal fees, court costs, and potential settlement costs.
4. Lender’s Requirement: While owner’s title insurance is optional, most mortgage lenders require borrowers to purchase a lender’s title insurance policy to protect their interest in the property. It’s often more cost-effective to buy an owner’s policy at the same time to protect your own interests.
5. Transfer of Clear Title: Owner’s title insurance ensures that you receive a clear title to the property, making it easier to sell the property in the future if you decide to do so.
6. Protection Against Fraud: Title fraud is a real concern, and owner’s title insurance can help safeguard your investment against fraudulent activity, such as identity theft or forged signatures on property documents.
7. Coverage for Hidden Risks: Title issues may not be immediately evident at the time of purchase. Owner’s title insurance covers “hidden risks” that may not have been discovered during the title search process.
8. Seamless Homeownership: Owner’s title insurance can help prevent the disruption of your homeownership due to unexpected title disputes, allowing you to enjoy your property without concerns.

It’s important to note that the specific coverage and cost of owner’s title insurance can vary by location and insurance provider, so it’s advisable to consult with your real estate attorney to understand the options available to you and make an informed decision about whether to purchase owner’s title insurance during the home-buying process.

REAL ESTATE & TITLE INSURANCE ATTORNEY SERVING THE SAVANNAH AREA

Tetreault Law specializes in real estate law and can help guide you throughout the closing process. If you have questions about owner’s title insurance or your real estate transaction in general, contact us. It’s crucial you have a competent real estate lawyer who will act as your closing/title agent, review your contract, and work with you throughout the entire process to minimize your risk of future disputes.