What is owner’s title insurance? Valid question!
As a new homeowner, you might already be swamped with mortgage documents, closing requirements, and paperwork—but there’s one thing that often gets overlooked: how to protect your legal rights to your new property.
That’s what owner’s title insurance is for.
So, what does it actually involve and how can you get it? Below, we’ll walk you through what owner’s title insurance is, what it covers, and why you’ll need it. By the end of this blog, you’ll have the insight you need to make a smart decision about your property and your future.
What Owner’s Title Insurance Is & Why You’ll Want it
Buying a home is a major milestone. It’s not just a place to live—it’s also a huge investment. That’s why you’ll often hear about owner’s title insurance policy when you’re closing on a house.
By definition, this policy is designed to protect your ownership rights in case hidden issues with the property surface down the line. These issues could be anything from back taxes to unresolved liens.
Unlike other forms of home coverage that focus on future events, like natural disasters, title protection looks backward, safeguarding you against defects or claims tied to the past.
According to the American Land Title Association (ALTA), these policies protect you from legal fees and other costs if your ownership is challenged.
That’s why choosing the right title insurance company is so important: you want a provider who offers clear answers, strong customer support, and reliable protection in case something unexpected pops up later.
What Owner’s Title Insurance Covers for Homeowners
When you buy a home, you take on not just the property itself but its history of ownership. A thorough title search is performed to find any potential problems, from unpaid property taxes to undisclosed heirs and clerical errors in public records.
Even something seemingly small—like a mistake in how the previous owner transferred ownership—can create complications that may land you in court!
An owner’s policy can handle the legal and financial burden if such an issue arises. Typically, title insurance policies will cover:
Unpaid Taxes
If the previous owner didn’t settle property taxes or other municipal charges, that debt could fall on your shoulders. Title insurance protects homeowners, covering hidden problems like these that could otherwise cost you thousands.
Hidden Claims
Sometimes, a person might surface claiming ownership rights to your house. This could be a relative of a former owner or someone with an undisclosed financial interest in the property. If this happens, title insurance pays for the defense of your rights—so you’re not stuck with unexpected legal fees.
Fraudulent Ownership Claims
Property fraud, forged signatures, and other deceptive tactics can threaten your rights. If you’re protected by the right policy, your claim should be covered and defended, keeping you from losing out on your investment.
Undisclosed Heirs
Sometimes, a long-lost heir or family member comes out of the woodwork, claiming they own the property or maybe a stake in the property. Owner’s title insurance proves you’re the rightful owner and can save you the money it would cost to hire a lawyer to dispute ownership.
Owner’s Title Insurance & Lender’s Title Insurance: What’s the Difference?
It’s common for mortgage lenders to require a lender’s title insurance policy, also known simply as a lender’s policy.
This coverage secures the lender’s interest in the property but doesn’t protect the actual homeowner. While a lender’s policy means your bank or financial institution won’t lose its stake if ownership defects crop up, it doesn’t guarantee your personal protection as the buyer.
Here’s where lender’s title insurance and an owner’s policy start to differ.
Essentially, the lender’s coverage ends once you pay off your mortgage. Owner’s coverage stays with you even after the loan is settled, giving you continued peace of mind throughout your time in the home. And while lender’s insurance protects the financial institution, an owner’s policy protects you. This keeps you covered for any unforeseen issues that might threaten your right to keep the property.
How to Choose the Right Title Insurance Provider for You
When shopping for owner’s title insurance, it’s helpful to work with a title company that specializes in real estate agent support as well as consumer guidance.
You want a provider with a solid reputation, an upfront approach, and plenty of experience handling complex closings. Remember, an owner’s policy can last as long as you or your heirs hold an interest in the property, so selecting the right team is a big deal. Here are a few steps you can take to find the right provider:
#1 Check Credentials
Look for membership in organizations like ALTA and ask how long the company has been in business. An established team is more likely to have the resources and expertise you need.
#2 Assess the Title Insurance Cost
In many cases, title insurance cost is tied to your home’s purchase price or state-regulated rates. Ask about fees upfront. A reputable provider will be clear and honest about what you can expect to pay.
#3 Look at the Range of Services
Does the provider offer escrow solutions or additional legal assistance if there’s a dispute? The more comprehensive their solutions, the easier it is for you to handle everything from closings to refinancing in one place.
#4 Compare Policies
While title insurance might sound standard, not all providers are the same. Some have better claims support or more flexible service hours. Don’t be afraid to shop around and buy title insurance from a company that feels right for your particular priorities.
Brick City Title Is Here for You
If you’re looking for a local insurance firm you can rely on, Brick City Title Insurance Agency is here to help.
We know how important it is to finalize your transaction without any roadblocks. Whether you need quick, efficient closings or expert advice on short sales and 1031 exchanges, our team has you covered.
You’ve got enough on your plate without having to worry about the complexities of title coverage. We work diligently to make sure everything runs smoothly as you purchase and protect your home.
Buying a home should be exciting! Contact us for a quote today, and let’s make getting owner’s title insurance one less thing to worry about!
