What is Title Insurance and Do You Need It?

You signed the papers on your dream house. It’s all yours. You’re already planning a new paint color, some light remodels and the garden in the back.

Then along comes someone to contest the ownership, or the title, of the property. But isn’t the house yours? If the title isn’t clear, you may be in for a battle of ownership. This is where title insurance comes in.

What is a title, what is title insurance?

First, a title is the ownership record of a property. When you hire a real estate attorney or a title company, they research the entire records of your property’s title to make sure it’s clear. If it’s not clear, or clouded, then another person could claim rights or ownership to the property.

Title insurance is a form of insurance that protect you if there is anything wrong with the title on your property. This could be a clerical error, something that was missed in the title investigation or any number of issues with the title that might put your ownership in question. Unfortunately, there are any number of ways that the title of your property could be disputed.

Do you need title insurance?

Yes. We’re going to make this easy for you. You need title insurance. You will be legally required to purchase title insurance by the lender, but it is also highly recommended that you purchase title insurance for yourself. It is a very small price to pay for something that could cost you your whole house.

Title insurance can cover you in case of:

• Previously unreported liens
• Forged transfers of ownership rights
• Financial loss due to defects in title
• Impersonation of true land owner
• Gaps in title chain
• Errors in recording or filing of documents
• Forged documents
• Anything missed in the title search

The list could go on.

One of the best things about title insurance is that it’s not a monthly or yearly policy. You purchase it once and you are protected for as long as you own the home.

Title insurance is a relatively low-cost, one-time fee that can give you peace of mind and potentially save you thousands upon thousands of dollars. Though it is rare for issues with the title to show up after a thorough title search, it is not unheard of. It is a case being better safe than sorry and we strongly urge all clients we work with to get title insurance.