Understanding Owners Title Insurance

Tempered glass is required above the bathtub

Tempered glass is required above the bathtub

“Do you want Owner’s Title Insurance?”  In every real estate settlement in  the Greater Lynchburg area, that question is asked by the closer, and   always, the buyer looks at me and says- “Do I need it?”.  I do not answer that question, but I do ask that the closer explain it, in detail, to the buyer.

Title insurance is protection from various situations that may affect the title to a piece of real estate.  Situations such as fraud or forgery, undisclosed heirs in prior ownership, incorrect legal descriptions, multiple or identical name situations and many others.  These may be hidden in even the most meticulous title searches and not uncovered for a period of time.

There are two types of title insurance – a lender’s policy and an owner’s policy.  Every lender does require a lender’s title policy if they are funding a purchase with a mortgage.  This type of policy only covers their interest and does not cover you.  An owner’s policy covers the defects as it affects your ownership and can also cover any errors that may have been made in the title search itself.  You may be told that the title searcher is covered, however, if the error is not discovered for a period of time, that title searcher  may no longer be liable due to the statute of limitations.

Its insurance, just like all types of insurance- coverage to protect from losses.  Its a one time premium and covers you as long as you own the property and after. So, do you need it?  You never know when you might, and if you have it, its there for piece of mind.


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