What is title insurance and why is it so important? Today, I’ll be explaining why title insurance is essential for homeowners.

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What is title insurance and is it something that you need when you purchase a property?

Title to a property describes the rights the owner has with regard to that property. In a nutshell, title insurance provides protection for the owner of a property in a case when an issue arises regarding their ownership and the rights provided by title. This policy can help to cover homeowners in a number of circumstances.

For example, what happens if someone receives a contract to sell their property only to discover during the contract period that there is a lien they didn’t place on the property dated before they even bought the home? Having purchased a title insurance policy when closing on the home in many cases will allow the seller to move forward with the sale without jeopardizing their contract. The title insurance company signed off on the title at the time of purchase and will stand in for the seller to insure it’s marketability.

There are many other situations where title insurance can provide coverage as well. Another example is a situation wherein a buyer had a survey done to determine the property’s boundary lines prior to closing. After the fact, the boundary lines come into question or an encroachment is discovered from a neighboring lot.

Having the combination of a survey and title insurance will provide protection against these issues negatively affecting your interest.

“IT IS IMPORTANT TO BE PROTECTED FROM THE UNEXPECTED.”

Situations like the ones above (and many others) bring the ownership interest the buyer has in the property into question.

Title insurance is there to help guarantee that the ownership and rights a buyer receives when buying their property are protected. Ultimately, no one expects to need this kind of insurance. Nevertheless, it is important to be protected from the unexpected.

I receive a number of requests each year from title companies asking for the seller’s title insurance policy due to something unexpected being found during the title search. In most cases, once the seller provides the policy the sale continues forward without issue because the insurance policy stands in for the seller. If no policy was in place the sale could be delayed, cancelled and the seller could be stuck with a sticky situation and no safety net in place.

Consider if you were to drive without auto insurance. People don’t get in their car anticipating a crash—but things sometimes happen. This is also the case with title insurance. You may never use it, but you don’t want to be without it when you need it.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.