Title insurance explained
The Importance of an Owner's Policy of Title Insurance
Title insurance protects important property rights — the ones you expect when you buy a home. Here's what an Owner's Policy is, why it matters, and how a one-time premium protects your biggest investment.
Why it matters
Your Property Rights Deserve Protection
When you buy a home, you expect to enjoy important property rights. For example, you likely expect to be able to occupy the property, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell your property or pledge it as security for a loan.
Title insurance is designed to protect these important property rights. Here are seven reasons why you should consider purchasing an Owner's Policy of Title Insurance.
Seven Reasons to Consider an Owner's Policy
- 1
Buying a Home Is a Big Investment
For a one-time premium, an Owner's Policy of Title Insurance helps protect it.
- 2
The Seller May Not Own the Home or Have Authority to Sell It
Title Insurance offers coverage against defects in title caused by fraud, forgery, incapacity, impersonation or the Seller's lack of authority to sell property.
- 3
Warranties in Your Deed May Not Guarantee Your Ownership of the Home
Even if the Seller warrants good title to you in the Deed, the Seller may not have the money to pay your losses if a problem arises. When an Owner's Policy of Title Insurance is purchased, you have the financial power to protect your interest in the property against loss from covered claims.
- 4
The Owner's Policy of Title Insurance May Cover More Than Just Ownership
Depending on the type of policy issued, coverage insuring against loss due to disputes over boundaries, access rights and easements may be provided to you. Ask about available options for extended or expanded coverage.
- 5
A Lender's Mortgage Title Policy Does Not Cover You
Your Lender has required you to pay for a Lender's Mortgage Policy of Title Insurance, but that policy only provides insurance to the Lender. A homeowner is not covered, and cannot make a claim, under a Lender's Mortgage Policy of Title Insurance.
- 6
The High Cost of Claims
Title disputes are not cheap. Are you prepared to pay a lawyer to fight for you in court? Title Insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle an adverse claim.
- 7
Coverage for a One-Time Premium
The premium for an Owner's Policy of Title Insurance is only paid once and covers you for as long as you hold an interest in the title to your home. The coverage automatically continues and could benefit your heirs as well.
Watch
Why to Choose an Owner's Title Insurance Policy
Know the difference
Owner's Policy vs. Lender's Policy
Owner's Policy
Protects you, the homeowner, and your financial interest in the property.
- Covers your full purchase price (or policy amount)
- Protects your property rights and your investment
- Covers you for as long as you hold an interest in the title
- Can benefit your heirs
Lender's Policy
Protects only your lender and their loan.
- Covers only the lender's loan balance
- You are not covered and cannot make a claim under it
- Required by most lenders, but protects the lender
- Does not protect your equity or property rights
Most homebuyers pay for a Lender's Policy without realizing it doesn't protect them at all. An Owner's Policy is the policy that looks out for you.
One-time cost
One Premium, Paid Once, Protecting You for as Long as You Own Your Home
The premium for an Owner's Policy of Title Insurance is paid only once — at closing. There are no renewal fees and no annual bills.
That single premium covers you for as long as you hold an interest in the title to your home. The coverage automatically continues, and it could benefit your heirs as well.
Common questions