Understanding Owner’s Title Insurance Cost

When buying a home, the last thing on most people’s minds is the possibility of issues with the title. Unfortunately, title issues can arise and cost thousands of dollars in legal fees to resolve. This is where owner’s title insurance comes in. In this article, we will discuss the cost of owner’s title insurance and why it is crucial to have when buying a home.

What is Owner’s Title Insurance?

Owner’s title insurance is a policy that protects the homeowner from any financial loss or legal expenses due to title issues that may arise after the purchase of a home. Issues with the title may include outstanding liens or judgments against the property, ownership disputes, or errors in the public records. If any of these issues arise, owner’s title insurance will cover the costs to correct the issue or provide financial compensation to the homeowner.

It is important to note that owner’s title insurance is different from the lender’s title insurance, which only protects the lender’s interest in the property.

How Much Does Owner’s Title Insurance Cost?

The cost of owner’s title insurance varies depending on the location of the property, the value of the property, and the insurance company. On average, owner’s title insurance costs around 0.5% to 1% of the purchase price of the home. For example, if you purchase a home for $300,000, the cost of owner’s title insurance may be between $1,500 to $3,000.

It is important to keep in mind that the cost of owner’s title insurance is a one-time fee paid at the time of closing, and the policy remains in effect as long as you or your heirs own the property.

Factors That Affect the Cost of Owner’s Title Insurance

Several factors can affect the cost of owner’s title insurance, including:

FAQ

What is included in owner’s title insurance?

Owner’s title insurance covers any financial loss or legal expenses due to title issues that may arise after the purchase of a home. This may include outstanding liens or judgments against the property, ownership disputes, or errors in the public records.

Do I need owner’s title insurance?

While owner’s title insurance is not required by law, it is highly recommended. Title issues can arise at any time, and the cost to resolve these issues can be significant. Owner’s title insurance provides peace of mind and financial protection in the event of any title issues.

Can I purchase owner’s title insurance after closing?

Yes, you can purchase owner’s title insurance after closing, but it may be more expensive. It is recommended to purchase owner’s title insurance at the time of closing to ensure the lowest possible cost.

How long does owner’s title insurance last?

Owner’s title insurance remains in effect as long as you or your heirs own the property.

Can I choose my own title insurance company?

Yes, you have the right to choose your own title insurance company. It is important to shop around and compare quotes from different companies before purchasing a policy.

Conclusion

Owner’s title insurance is a crucial policy to have when purchasing a home. It provides financial protection in the event of any title issues that may arise after the purchase of the property. The cost of owner’s title insurance varies depending on several factors, including the location of the property, the value of the property, and the insurance company. It is important to shop around and compare quotes from different insurance companies before purchasing a policy.