Title Insurance: Is it Worth It?

Title insurance protects the insured from a financial loss related to the ownership of a property. Two policies are recommended at a home loan closing: the lender's policy, which is required, and an optional owner's policy. A monthly premium will not be added to your mortgage payment. Title insurance is a one-time upfront cost. 

 

According to a spokesman for the American Land Title Association, one of every three title searches reveals a problem affecting the title to a property. Expenses can add up quickly when every dollar counts. It can be tempting to decline an optional owner’s title insurance. When you do the math, an owner’s policy of title insurance is quite reasonable. Your home is the single most substantial investment, and an essential part of title insurance is its emphasis on risk elimination before insuring. This gives you, the policyholder, the best chance of avoiding title claim and loss. Budgeting for that coverage may require some discipline when budgeting in the short term, but the peace of mind you get in the long run is priceless.

 

Here are some benefits of title insurance for homeowners:

  • Protects you from financial loss due to covered claims against your title, up to the policy's face amount.
  • Pays your legal costs if the title insurance company is required to defend your title against covered claims.
  • Pays out successful claims against your title, up to the face amount of the policy.
  • Continues protection after you no longer own the property.

 

The lender’s title insurance policy covers claims that affect the lender’s loan. Additionally, here are some benefits of lender’s title insurance for homeowners:

  • Safeguards against forged signatures and recording errors.
  • Keeps the lender protected against deed indexing mistakes, unpaid property taxes, and other recorded liens.
  • Covers against improper foreclosures, title search errors, undisclosed easements, and even title claims by heirs and ex-spouses.

 

 Before closing on your home, ask about title insurance protection, and be sure to protect your home with both a lender’s and owner’s title insurance policy. 

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