Title Insurance for Owners

When you buy a property, you want to make sure that you own it legally and that no one else has the right to take it away from you. However, there is always a risk that someone could have a claim against your property because of something that happened in the past. That’s where title insurance comes in.

What is Title Insurance?

Title insurance is an insurance policy that protects you against loss if someone challenges your ownership of your property. It covers the legal fees and other costs associated with defending your title.

There are two types of title insurance: lender’s title insurance and owner’s title insurance. Lender’s title insurance protects the lender’s interest in the property, while owner’s title insurance protects the owner’s interest.

In this article, we will focus on owner’s title insurance.

Why Do You Need Owner’s Title Insurance?

When you buy a property, you get a title that proves your ownership. However, there are many problems that could arise that would challenge your ownership.

For example, someone could come forward and claim that they have a right to the property because it was improperly sold or transferred in the past. Or, there could be a lien on the property that was not disclosed to you when you bought it.

Without owner’s title insurance, you would have to pay for the legal fees and other costs associated with defending your ownership in these cases. These costs can be substantial, and they could even exceed the value of your property.

With owner’s title insurance, you are protected against these losses. If someone challenges your ownership, your insurance policy will cover the costs of defending it.

What Does Owner’s Title Insurance Cover?

Owner’s title insurance covers a wide range of issues that could arise with the ownership of your property. These include:

Issue
Example
Forged documents
Someone forges a signature on a document transferring ownership of the property
Fraud
Someone pretends to be the owner of the property and sells it to an unsuspecting buyer
Undisclosed heirs
Someone comes forward claiming to be a long-lost heir of the property’s previous owner
Liens and judgments
There are unpaid debts or taxes owed on the property that were not disclosed at the time of purchase
Boundary disputes
There is a disagreement over where the property lines are

If any of these issues arise and you have owner’s title insurance, your insurer will cover the costs of defending your title.

How Much Does Owner’s Title Insurance Cost?

The cost of owner’s title insurance varies depending on the value of your property, where it is located, and other factors. Generally, you can expect to pay between 0.5% and 1% of the purchase price of your property for owner’s title insurance.

While this may seem like a lot of money, it is a one-time cost that provides you with protection for as long as you own your property. Compared to the potential costs of defending your title without insurance, the cost of owner’s title insurance is relatively small.

FAQ

Do I Really Need Owner’s Title Insurance?

While owner’s title insurance is not required by law, it is highly recommended. Without it, you could be responsible for paying the costs of defending your ownership if someone challenges it.

What Happens if I Don’t Have Owner’s Title Insurance?

If you don’t have owner’s title insurance and someone challenges your ownership, you will be responsible for paying the legal fees and other costs associated with defending it.

How Long Does Owner’s Title Insurance Last?

Owner’s title insurance lasts for as long as you own your property. If you sell your property, the new owner will need to purchase their own title insurance.

Can I Purchase Owner’s Title Insurance After I Buy My Property?

Yes, you can purchase owner’s title insurance after you buy your property, but it is generally recommended that you purchase it at the time of purchase.

How Do I Purchase Owner’s Title Insurance?

You can purchase owner’s title insurance from a title insurance company or from your real estate attorney.

Conclusion

Owner’s title insurance is an important protection for anyone who owns a property. It provides you with peace of mind and financial protection against the many issues that could arise with the ownership of your property. While it is not required by law, it is highly recommended.