Should You Get Title Insurance?

As a homebuyer, you're likely to be familiar with the term "title insurance." But do you know what it means, why you need it, and what it covers? In this blog, we'll explore these questions and help you determine if title insurance is right for you.

First, let's define what title insurance is. When you purchase a property, you're buying the "title" to that property, which is essentially the legal right to own and use it. Title insurance protects your ownership rights to that property. Specifically, it provides coverage for any issues related to the title that may arise after the purchase.

So why do you need title insurance? One of the biggest reasons is to protect yourself against any potential legal or financial issues that may arise due to title defects. For example, a title defect may occur if there was an error in the public records, such as a mistake in the spelling of a name or a missing signature. These types of errors could make it difficult or even impossible for you to sell or refinance the property down the line.

Another example of a title defect is when there are liens or claims on the property. For instance, if the previous owner didn't pay property taxes, the government may have a lien on the property. If you buy the property without knowing about this lien, you could end up being responsible for paying it off.

Title insurance can also cover you in case of fraud or forgery. For example, if someone forges a signature on a document related to the property sale, it could cause legal problems down the line. Title insurance can help protect you in these situations.

So what exactly does title insurance cover? The answer can vary depending on the policy and the insurer, but in general, it can provide coverage for issues such as:

• Existing liens or judgments against the property
• Fraudulent activity related to the title, such as forgery or impersonation
• Encroachments or easements that were not disclosed before the purchase
• Errors or omissions in public records or property surveys
• Boundary disputes or zoning violations

It's important to note that title insurance only covers issues that occurred before the purchase of the property. It does not cover any issues that may arise after the sale, such as property damage or personal liability.

So, should you get title insurance? The short answer is yes. In most cases, it's highly recommended to get title insurance to protect yourself against any potential title defects that may arise. It's a one-time cost that can provide peace of mind and financial protection for as long as you own the property.

If you're in the process of buying a property, your real estate agent or lender can provide more information about title insurance and help you find a reputable insurer. With title insurance, you can rest assured that your investment is protected and that you're the rightful owner of your new home.