Buying a home is one of the biggest investments most people will make in their lifetimes. Protecting your home with title insurance is a small investment by comparison, but it can save you big in the long run. We insure our health, our lives, our cars, our homes, our businesses and our belongings. Most insurance policies protect you from things that will happen in the future, but title insurance works differently. This insurance protects you from things that happened under previous ownership of the property that don’t come to light until you own the property. We will break down why we believe title insurance is always worth the cost, because like most insurances, when you need it you really need it.
Protect Yourself From a Financial Loss With Title Insurance
When you purchase your home, your title company will run a title search to check for any issues, but not all issues can be detected from this title search. Some common title issues that arise are liens, missing heirs or an undiscovered will, forged documents, easements, survey disputes, public record errors, bankruptcy or a break in the chain of title. After the home sale is complete, you are responsible for resolving any issues that arise from the previous owners. Even if the case is something you can win in court, there will still be court costs associated with resolving the discrepancy. One court case alone, even a court case you win, will likely cost far more than the cost of the insurance policy just in legal fees.
Spend Minimally on Title Insurance to Protect Majorly
Prices can vary from location to location, but expect to spend between around $1,000 and $4,000 on insurance to protect your title. Considering that you are purchasing a policy that will protect your property that is likely hundreds of thousands of dollars, the relative cost is very low. Sometimes you can even negotiate that the sellers purchase coverage for you as part of your contract to purchase the home. The premium is a one-time expense, paid in full at the time of closing, so you don’t have to worry about one more monthly expense or another debt you owe.
Protect Yourself From Losing Your Property With Title Insurance
If a major title defect arises after closing and shows someone else to be the owner of the property, you could risk losing your title altogether and losing the property. This can happen in the instance of forged documents, an inheritance that comes to light after closing or the home being sold at a tax sale without the previous owner’s knowledge.
Title defects happen and if they do, don’t allow it to be one more financial stressor. When you have title insurance in place, you can sleep easy knowing you’re protected from any potentially costly issues that may arise after you go to closing on your new property.