Title insurance is crucial to protecting your investment in real estate. Many homeowners focus on physical security measures like smoke alarms and deadbolt locks, but what about protecting your ownership rights? This is where an Owner’s Policy of Title Insurance comes into play.
Simply put, a Loan Policy of title insurance only protects the lender’s interest, leaving the landowner vulnerable. If you lose title to the land, you could still be on the hook for the debt owed to your lender. Even more concerning, if a claim is paid on the Loan Policy, you may need to reimburse the title insurer for the claim paid to the lender.
Imagine building equity in your land over the years, only to lose it due to a title claim. This scenario is avoidable with an Owner’s Policy of title insurance. This policy protects your interest in the land, and you must purchase it separately from the lender’s policy.
An Owner’s Policy can be obtained for a one-time premium. It covers you for as long as you own the land or have liability under a title warranty when you sell the property. Additionally, the policy covers the cost of defending you if you are sued over a covered matter.
But what exactly does an Owner’s Policy cover? It protects against a range of potential issues such as someone else claiming ownership of your land due to a break in the chain of title, fraud, forgery, or undue influence over an incapacitated person. It also covers claims of liens on your land, blockages to your legal access, and more.
When considering title insurance, it’s essential to understand that a title insurance commitment is not an Owner’s Policy. It merely outlines the coverage that will be provided in the Owner’s Policy. Always ask to review a title insurance commitment for an Owner’s Policy and get a quote for its cost before deciding.
Your home may be new to you, but every property has a history that could pose hidden issues in the chain of title. An Owner’s Policy of Title Insurance protects your investment from errors in public records, unknown liens, illegal deeds, missing heirs, and more. Unlike other insurance models with ongoing premiums, title insurance is a one-time premium paid at closing.