As any homebuyer can attest, there are a lot of decisions to be made on the way to the closing table.
One that can stop many buyers in their tracks: “Do you want an Owner’s Policy of Title Insurance?”
Let’s face it - title insurance is not a thing most people think about.
Most buyers are (understandably!) confused about the difference between homeowners insurance and an owner’s policy of title insurance.
Homeowners insurance protects the physical structure on your property.
Title insurance protects your right to the land on which the physical structure sits.
As you approach the closing date, here’s where it again gets confusing for most people: you will be required by your lender to have a Lender’s - also known as a Loan or Mortgagee’s - policy of title insurance. Many homebuyers mistakenly think this offers them some form of protection. It actually only protects your lender’s interest in your property, and is only valid for the life of the loan.
But when you pay a one time-fee to purchase an owner’s policy of title insurance, it protects your interest in the property forever.
That policy will list everything that is considered a permitted lien or encumbrance on the property at the time you take title. If there is, for example, an easement for the utility company to maintain transmission to your property, or a right-of-way for a neighbor to access a waterway, that will be specified on the policy. The legal description of your property will be set forth, and anything that is an active matter of record affecting the property will be listed on the policy.
Should any claim, question, or dispute ever arise from any matter that was not listed on your owner’s policy, or from an erroneous interpretation of a matter listed on the policy, the title insurance company will defend your right to the property against that claim, question or dispute.
We know how much you love your new home - and that is why we strongly recommend an owner’s policy of title insurance to protect your interest in the real estate.