How Does Owner’s Title Insurance Protect Me?

Purchasing real estate is one of the biggest investments most Americans make. Not only is your house and property a valuable financial asset, it is also where you raise your family, make lifelong memories, and the place you call home. To help protect your home, you likely carry homeowner’s insurance, possibly have home warranty policies, and take other measures to mitigate factors that may threaten your property. But what would happen should another party claim to have ownership rights to your family’s home? Here is where an owner’s title insurance policy comes into play.

What Is Owner’s Title Insurance?

There are two forms of title insurance: lender’s policies and owner’s policies. Lender’s title insurance protects the mortgage lender’s financial interests should home loan repayment default or become unenforceable. 

Owner’s title insurance is a type of indemnity insurance policy that helps protect a homeowner against financial loss, or the loss of their property, should title defects be discovered at any point after closing. Title defects are problems with the chain of title and represent another party’s ability to have some level of ownership claim to the property. Common title defects include:

  • Liens
  • Judgements
  • Recording errors
  • Fraud and forgery
  • Undisclosed heirs
  • Improperly probated wills

What Are the Benefits of an Owner’s Policy?

The level of coverage provided by owner’s title insurance varies between standard and enhanced policies. In general, an owner’s policy helps remunerate a homeowner for financial loss in the event certain title defects are discovered and said defects allow another party to have a credible ownership stake. These policies may also cover all or a portion of any legal costs should you need to go to court to defend against title defects. 

How Much Does Owner’s Title Insurance Cost?

The cost of an owner’s title insurance policy corresponds with the value of your property. It is calculated as a percentage of the purchase price of the home. Payment is provided as a one-time premium rendered at the time of the real estate sale and is part of the overall closing costs. 

Perhaps one of the greatest benefits of an owner’s title insurance policy is the peace of mind it provides when it comes to protecting your real estate asset. To learn more about title defects or title insurance, please contact the knowledgeable team at Linear Title & Escrow today. 


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