Understanding Owner’s Title Insurance Policy

When you buy a property, it is important to secure an owner’s title insurance policy to protect you from any future legal claims and losses. This article will provide an in-depth understanding of owner’s title insurance policy, what it is, why it is important, and what it covers.

What is Owner’s Title Insurance Policy?

An owner’s title insurance policy is a form of insurance that protects you, the property owner, from financial losses arising from any legal claims or defects in the property’s title. It essentially protects your ownership rights to the property and ensures that no one else can claim ownership of the property.The policy is typically purchased during the closing process of a real estate transaction and lasts for as long as you own the property. It is a one-time payment and is usually a small percentage of the property’s purchase price.

How Does Owner’s Title Insurance Policy Work?

When a title search is conducted, it is possible to miss certain defects in the property’s title, such as liens, unpaid taxes, or prior claims to ownership. If any of these defects surface after the purchase of the property, it could result in costly legal battles.If you have an owner’s title insurance policy, the title company will be responsible for covering the costs of any legal battles and will compensate you for any losses incurred due to the title defect.

What Does Owner’s Title Insurance Policy Cover?

Owner’s title insurance policy covers a wide range of legal claims and title defects that may arise after the purchase of a property. Some of the most common defects that the policy covers include:

• Fraudulent ownership claims
• Liens and judgments against the property
• Errors in public records
• Undisclosed heirs or missing heirs
• Illegal deeds or wrong signatures on the title
• Encroachments or easements on the property

Why is Owner’s Title Insurance Policy Important?

Buying a property is one of the most significant investments that most people make in their lifetime. An owner’s title insurance policy helps to protect this investment by providing peace of mind and financial security.Without the policy, you could be liable for any legal claims or losses incurred due to defects in the property’s title. This could result in significant financial losses and even the loss of your property.

What are the Benefits of Owner’s Title Insurance Policy?

Some of the benefits of having an owner’s title insurance policy include:

• Protection against financial losses due to title defects
• Peace of mind knowing that your ownership rights are protected
• Assistance from the title company in resolving any title issues
• One-time payment for a lifetime of protection

Is Owner’s Title Insurance Policy Mandatory?

Owner’s title insurance policy is not mandatory, but it is highly recommended. Lenders usually require a separate insurance policy, known as lender’s title insurance policy, to protect their investment in the property.However, lender’s title insurance policy only covers the lender’s interest in the property, not the owner’s, so it is essential to obtain an owner’s title insurance policy to protect your investment.

Conclusion

An owner’s title insurance policy is a crucial investment for any property buyer. It provides financial security and peace of mind knowing that you are protected from any legal claims or title defects in the future.With an owner’s title insurance policy, you can enjoy your new property without any worries and be assured that your investment is protected for a lifetime.