The purchase of a home is the single largest financial investment most Americans will make in their lifetime. Simply put, owner’s title insurance is the only mechanism or protection to insure that you actually own that investment free and clear of any claims by others. The premium is a nominal one-time fee paid at closing. While a title search performed by a competent title
examiner (with a reputable company to stand behind it) will help discover many potential title problems, there are many problems that cannot be discovered by an examination of title: forgeries, incompetent parties, unknown heirs, later discovered wills, and mechanic’s liens are but a few examples of problems that cannot be discovered from examining courthouse records. Also bear in mind that you might not discover the title examiner was negligent and missed something he should have found until years later when you try to sell your house, and in most cases the statute of limitations will have run leaving you with no one to look to for help or compensation for the examiner’s negligence.
Owner’s title insurance protects you, without further charge, for not only as long as you own your home but long after you sold it in case you ever get sued back through the chain of title. The lender’s title insurance policy, which will be required by your lender, does not afford the owner any protection whatsoever.
In summary, owner’s title insurance should be purchased for the same reason all other types of insurance is purchased -- to protect a significant investment from a loss too large to absorb without it. And while catastrophic title defects do not occur frequently, title problems of a lesser nature occur all the time. Typically, the cost in attorney’s fees and the delayed sale of your house and/or the closing almost always exceed the cost of the premium.
Feel free to contact us, or Brian D. Lytle at Lytle Law (757-595-5655), for questions specific to your situation. We'd love to help!
Are you looking to start the home buying process? Email us at concierge@lizmoore.com, we'd love to help! Or, click below to download our free Home Buyer's Handbook.
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