What is Owner’s Title Insurance and Why is it Important?


keys to house with home ownership documents

What is Title Insurance?

A title policy is an insurance policy that protects the financial interest in a property. There are two types of title insurance policies. The lender’s title insurance policy and the owner’s title insurance policy.

Typically, the lender will always purchase a lender’s title insurance policy to protect their investment. This insurance policy fee is part of the closing costs and is always reflected as a lender charge on the closing disclosure.

The owner’s title policy is an optional insurance policy that is not required in order to purchase a home. However, any Real Estate Professional that you work with will always recommend the purchase of this policy, in order to prevent any financial losses to the new home owner from previous home ownership.

Why is Owner’s Title Insurance important?

Homeowner’s have many options to consider when determining the best possible protection to keep their homes safe and secure for their families. Many homeowners choose to install smoke alarms, deadbolt locks, and home security systems as important lines of defense to ensure their peace of mind. An Owner’s Policy of Title Insurance is
an optional protection available to homeowners who choose to provide an added layer of security and protection. Your home may be new to you, but every property has a history. There may be hidden issues in the chain of title which could affect your ownership, such as:
• Errors in Public Records • Unknown Liens • Illegal Deeds • Missing heirs • Forgeries • Undiscovered Encumbrances • Unknown Easements • Boundary/Survey Disputes • Undiscovered Will • False Impersonation of Previous Owner

What does Title Insurance protect?

An Owner’s Policy of Title Insurance protects your investment for as long as you or your heirs have an interest in the property. Additionally, the title insurance company will, at its own expense, defend the title and will pay losses within the coverage of the policy if they occur. Unlike other insurance models, where premiums are paid on an ongoing basis, title insurance is a one-time premium paid at the closing of your transaction.

What is A Real Estate Title Search?

In Real Estate, a title search is the process of verifying the home seller’s right to transfer property ownership to someone else. It verifies any claims, errors, assessments, debts, any type of liens, any title deficiencies, and any restrictions that may be outstanding on the property.

Take a look at this excellent guide by McMichael & Gray, a reputable Attorney Law Firm in the Atlanta area.

OwnersTitleInsurance

Liked this topic? Read more: American Land Title Association and Home Closing 101.

 Have Questions or Comments? Please let me know!


About Erika Lewis

REALTOR® & Real Estate Professional in Atlanta. Looking to Buy or Sell in Atlanta? Contact me Today! [email protected] Allow me to connect you with a Top REALTOR®/Real Estate Agent in your local market.