The Importance of Owner’s Title Insurance

The Importance of Owner’s Title Insurance

What is Title Insurance you ask? 

It is insurance against the RISK that the title to your property is not valid and it protects you against claims others may bring against you regarding your property rights.

Often times I am asked “Why should I purchase a title insurance policy if you have performed a title search of my property?”.  Although there are a number of grounds, the main reason an owner of real estate should purchase a title insurance policy is for protection against claims brought that are the result of unrevealed defects in the chain of title.  Those defects that are unable to be detected upon the performance of a thorough title examination.  I have been closing commercial and residential real estate transactions for almost twenty-five years now and I have seen some doozies!

A perfect example would be a forgery in a prior Deed in the chain of title.  While Deeds here are required to be executed in the presence of a Notary Public, unless you are there to be sure that the Notary actually required a form of ID or otherwise verified the signature of the person conveying title to the property, this would be an unknown.  Many cases in a multitude of jurisdictions have been brought by former spouses claiming they did not sign the Deed and they were unaware that their ex sold the property they once held jointly.  The former spouse whose signature had been forged has a lawful claim to an interest in the property.  Oooops, now what? 

How would title insurance protect you in this instance?  When the claim is made and you submit it to your title insurance company, they handle everything from there.  They have a team of lawyers that will investigate the claim, gather all of the evidence, and, if the claim is valid, will handle the litigation and resolution of the matter on your behalf.  You do not need to independently retain counsel and pay another lawyer a retainer fee, which could cost anywhere between $2,500 and $10,000.00 depending on the case and additional out of pocket expenses could be incurred during the litigation process. That’s a lot of dough to come up with if you didn’t have title insurance!

There are other benefits to purchasing an owner’s title insurance policy and unlike auto insurance and homeowner’s insurances, you only pay the premium one time and it is effective coverage for the amount of insurance purchased throughout your ownership of that property.  Please visit my website at tldutton.com under the resources tab to learn more about title insurance and the importance of having your own policy or just call me at 865-366-5263, I’m always happy to answer any questions.  Please also remember that the lender’s title insurance policy does not protect you, it protects the lender.  Remember the golden rule, those with the gold…...rule!

The purchase of your home is arguably the single largest investment the majority of us make in our life time.  Wouldn’t you want the peace of mind to know you are protected against such issues?  Not to mention those sketchy exes?