What is Title Insurance and Do You Need it?

Like all types of insurance, title insurance is designed to offer you financial protection in the event that unforeseen problems arise with your property’s ownership history, which could result from errors in the titling records of your home or other past ownership issues.

There are two types of title insurance policies – one that covers the mortgage lender (required by your bank) and one that covers you, the homeowner. They are both one-time expenses rather than ongoing monthly premium payments and will help safeguard you in that event that, unbeknownst to you, someone else may actually have a legal right to your home.

A tale of two titles (title insurance policies, that is)

Mortgage lenders require homeowners to pay for a lender’s title insurance policy during closing. Conversely, homeowner’s title insurance is an optional policy either the buyer or even seller can buy to protect the new buyer from any problems (fraud, forgery, or otherwise) in the past documented home ownership history.

In the event that something does come up, your title insurance will protect your rights and compensate you for your losses if you were to happen to lose the property.

Why get title insurance?

Titling problems or defects can lead to serious consequences for a property owner. Whether it is legal headaches and costs associated with a claim brought against you or a much worse problem that leads to the loss of your property, protecting your stake in your home’s purchase is often a smart move for most home buyers. After all, you never know when a title claim might occur – it could be long after you’ve purchased the home.

Purchasing title insurance is a way to mitigate risk and safeguard your home’s purchase, but it is a personal choice to make. If you have questions about what title insurance is and why it might be a good choice for you, get in touch with our team of experienced real estate lawyers at Silverberg | Brito, PLLC. We can help you understand your options and decipher insurance policies so you stay protected.