Do I Need Owner’s Title Insurance?

Buying a home is one of the biggest financial investments many Americans make. While homeowner’s insurance can help protect a home against monetary loss due to physical damage, title insurance serves to mitigate risks resulting from title problems (referred to as “title defects”). A title defect is any factor that clouds the evidence surrounding true ownership of a property, or one that allows another party to claim some ownership stake in your real estate investment. An owner’s title insurance policy can help assuage this risk, and help protect you from financial loss surrounding your home. 

What Is Owner’s Title Insurance?

An owner’s title insurance policy is a one-time premium paid at closing. It is an indemnity insurance plan that protects the homeowner in the event another party has a valid claim to some form of ownership in their property. While most lender’s require homeowners to purchase a lender’s title insurance policy (in the event the mortgage becomes unenforceable), an owner’s policy is not mandatory. It is, however, highly recommended to help protect your home against title defects that were not discovered during the title search conducted prior to closing. There are two types of owner’s title insurance policies, known as standard and enhanced. Talking with an experienced title agent can help you determine which of these options might be right for your needs.

Key Benefits of Owner’s Title Insurance

Owner’s title insurance offers a number of benefits to you as a homeowner. It can help cover legal costs to defend your property rights in a court of law or remunerate you if the property is lost to a valid ownership claim. Owner’s title insurance can help protect your property and your real estate investment against a number of unforeseen title issues, some of which include:

-Fraud or forgeries

-Unknown heirs

-Recording errors

-Liens or judgments

-Boundary disputes

-Restrictive covenants

-False impersonation

-Improperly probated wills

-Easements or other encumbrances

For more on title insurance, please contact the experienced team at Linear Title & Escrow!


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