Owner's title insurance is essential when owning a home or any piece of real property. Title insurance provides a guarantee of ownership that can protect your interests should any title issues arise. Most homeowners may recall seeing something about title insurance on the settlement statement at closing, but don't be too quick to assume that you are covered.
Most lender's require a Loan Policy when they issue you a mortgage. The Loan Policy is usually based on the dollar amount of the mortgage. It protects the lender's interest in the property should a problem arise with the title. This Policy, however, does not protect any equity you have in the property above the loan amount.
It is an Owner's Policy that protects you, the owner of the property. It can be purchased for a one-time fee at closing and lasts as long as you or your heirs have an interest in the property. It is generally issued for the purchase price of the real estate.
This is not a time to be frugal. Do not try to save a few hundred dollars just because a title search was run showing a clear title. Issues can arise that can cloud a title even after a search was done. Just a few common issues that can arise are incorrect legal descriptions, unpaid taxes, forgery & fraud, conveyance by a minor and missed easements.
Don't find yourself sitting on a piece of property that may not be yours without title insurance. Consult with a real estate attorney and your real estate agent concerning your real estate transaction to make sure your interests are protected.
