What Is Owners Title Insurance, and Do You Really Need It?

Buying a home comes with a lot of decisions, and one term many buyers hear for the first time is owner's title insurance. It's typically asked when the buyer has an accepted offer on a home and the title company starts working on the paperwork.

While homeowner's insurance protects the home itself, title insurance protects your ownership of the property.

What Is Owner's Title Insurance?

Owner's title insurance helps protect you from certain title issues that existed before you purchased the home. These problems may not be discovered until after closing and could potentially affect your ownership rights.

What Can Cause a Title Problem?

Some common examples include:

• Unpaid taxes or liens

• Errors in public records

• Forged documents

• Fraudulent property transfers

• Undisclosed heirs

• Mistakes in legal descriptions

Many of these issues can date back years and may have occurred long before the current owner purchased the property.

What Does the Title Company Do?

Before closing, the title company performs a title search to identify potential issues affecting the property. If problems are discovered, they are typically addressed before the transaction is completed. This can be paying off a lien, correcting errors in public records, etc.

What Happens If an Issue Is Found Later?

If a covered title issue surfaces after closing, your owner's title insurance policy may help cover legal costs, defend your ownership rights, and protect you from covered losses.

It's typically a one-time cost at closing, and the protection lasts for as long as you own the property.

Final Thoughts

For most people, a home is one of their largest investments. Owner's title insurance provides an extra layer of protection and peace of mind, helping safeguard your ownership long after closing day.

If you're buying a home and have questions about title insurance, don't hesitate to ask your REALTOR® (ME!), lender, or title professional – need a recommendation? Let me know! Understanding how it works can help you feel more confident throughout the home-buying or selling process.