When you buy a home, confirming that the title is free from hidden problems is crucial. Title insurance protects you from ownership claims or legal issues that might arise after you close the deal. Knowing how title insurance works can help you avoid unexpected costs and legal battles.
What does title insurance protect against?
Title insurance covers defects in the property’s ownership history that weren’t discovered during the buying process. These defects might include unpaid property taxes, liens placed by creditors, forged signatures on previous documents, errors in public records, or even unknown heirs claiming ownership. If any of these problems appear after closing, title insurance pays for legal defense and any financial losses connected to the defect.
Why is title insurance important for buyers?
Even with a thorough title search, some risks can go unnoticed. Title insurance gives you peace of mind by protecting your investment from these hidden issues. Without it, you could face costly lawsuits or even lose ownership of your property if someone successfully challenges your title.
How do you get title insurance?
You usually purchase title insurance at closing, along with other settlement costs. The insurance company first performs a detailed title search to identify potential issues. If the search reveals no serious problems, the insurer issues a policy. This policy lasts as long as you own the property, covering you against future claims related to past ownership defects.
What about the cost of title insurance?
The price varies based on the property’s value and location, but it is generally a one-time payment made at closing. While it may seem like an extra expense, title insurance can save you thousands by preventing legal troubles later.
Protect your home investment
Buying a home is one of the most significant financial decisions you will make. Title insurance protects your rights and financial investment from surprises that could threaten your ownership. It’s a smart way to safeguard your property and avoid expensive disputes.
