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  • Writer's pictureJoseph Vu

LegacyHouse Title Insurance: Why Purchasing Title Insurance is a good idea

Updated: Jul 12, 2023

Benefits of Purchasing Title Insurance


Many people who come across this blog may know what Title Insurance is but don’t know what it does and how beneficial it can be to have Title Insurance. Before jumping into the benefits of Title Insurance let’s go through a rundown of what Title Insurance is and what it provides to the customers. Title Insurance essentially is a policy in which covers third-party claims on properties that don’t show up within the first initial title search. The term “Title” basically refers to a person who has legal ownership of the property. Some people may not know that a title claim could happen anytime especially after you owned a property for so many years and even then you may not even know someone else has ownership rights on the property that either you bought or have offered to buy.

Different types of Title Insurance and their benefits:

There are two types of Title Insurance: Lender’s title insurance (which is also a loan policy) and owner’s title insurance. A lender’s title insurance policy is what protects the financial interests of the company that issues the mortgage and owner’s title insurance protects the homebuyer in which the coverage amount is normally equal to what the purchase price and it also remains constant for as long as you or your heirs own the property. Some main issues that an owner's title insurance can protect you against can be things like errors on the property deeds, improperly recorded documents, encroachments which is a intrusion on a person’s property such as a fence or a shed that has been there for so long and the new buyers want that off the property, and so many other issues that an owner’s title policy can protect you against. Having Title Insurance can be a big help especially if the public record search conducted by the titled company fails to catch any liens or ownership disputes.

What is Title Insurance and how it works:

Title insurance is what essentially covers underlying issues with a property’s title and protects lenders and homebuyers from financial loss sustained from the property’s title and in most cases with Title Insurance it can be missed before you even purchase the home. Not only that, but Title Insurance can also provide a cash settlement to a new owner that purchased the property with a forged deed from a fraudulent seller who did not actually own the home.

3 most common questions that are asked when talking about Title Insurance:

What are your title insurance rates?

Throughout the whole process there are most cases where the buyers forget to ask how much the title insurance rates will be. This can be a big mistake as the prices vary depending on where you live and the price of your home/property. The average cost of title insurance is around $1000 per policy and in many states title insurance premiums are set by the state, which means that you’ll pay the same amount no matter what title insurance company you choose. But there are some states that don’t regulate title insurance fees at all like California and New Mexico and even then rates can vary from one title agency to the other. By asking what are the title insurance rates it allows you to understand which policy fits you best and prevents you from losing any part of that investment.

Do I really need Title Insurance?

You may be asking yourself “Do I really need Title Insurance?” and the answer is yes and no. This is the case because when it comes to title insurance a lender’s title insurance is required but having an owner’s title insurance is optional. Having a Title Insurance can be very helpful especially when buying a new home. Not only that but it also protects you against losing any equity and the right of living in the home after you have purchased it. Although some feel that spending money on title insurance is a waste especially if it’s never needed, it’s important to have it in case something does happen where title insurance will protect your interest in case anything were to happen to your home.

What is not covered by Title Insurance?

Most people think Title insurance covers mostly anything but that’s not entirely true as within the policy it doesn’t cover all “property-related claims and incidents.” Some examples of what isn’t covered by Title Insurance is pest infestations as title insurance doesn’t cover incidents that lead the property to be worsening after the property has been closed. Weather damage such as wind damages or fire damages won’t be covered by the title insurance policy because it doesn’t harm the home’s title which is a secured document that serves as proof of legal ownership of the property and only homeowners insurance would be able to cover damages like that. Mold or mildew won’t be covered by title insurance either no matter how much of it begins to form homeowners insurance is needed to have those damages covered.

Call To Action:

Click the link below to find out more information on Title’s Insurance

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