Why Should You Purchase An Owners Title Insurance Policy

Dated: 07/11/2017

Views: 154

          When someone purchases a home they are probably making the largest investment of their life. Therefore we believe protecting such an investment against title defects is extremely important. Accordingly,  a title company will perform thorough title exams with the understanding that a buyer trust them with their largest and most important investment. 

          However, the most thorough title exam may not reveal some title defects. The title exam is only as good as the public records available that the title exam is based upon. If someone either mistakenly or purposefully failed to record information in the public records, a hidden defect could exist in the chain of title. Defects in the chain of title could stop a a sale from occurring or could cause your title to be unmarketable in the future. 

         Title insurance provides protection from the losses that can occur because of the defeats in the chain of title. Title defects, such as undisclosed liens or privileges against the property, unrecorded transfers and erroneous or even fraudulent succession documents can result in expensive litigation cost to the home-buyer, as well as the risk of the losing the home.   

         Lenders usually require a title policy in their favor when they are accepting a mortgage to finance the purchase of the property. The lender's policy provides protection to the lender up to the amount of the loan secured by the mortgage. The lenders policy does not provide protection to the homebuyer. However, the homebuyer can choose to pay the one time premium for an owner's title policy. The homebuyer and their heirs would then be protected up to the amount of the purchase price. This policy also only requires one premium payment for protection as long as homebuyer owns the property. 

      Owner's title insurance provides the homebuyer with legal defense to any claim to title by others, covers expenses to clear title defects whenever necessary and possible and to cover the homebuyer's loss in the event the title defense is unsuccessful. In comparison to the value of the homebuyer's investment, the one-time premium is very small. However, protection is PRICELESS.    

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