One crisp autumn morning, Jack and Kate went to pick up their moving van to begin packing their belongings and move into their first home. They had just gotten married the week before and closed on the house of their dreams. The closing went quick and smooth and all they could focus on were the memories they were going to make in their first home together. The halls would echo with their future children’s laughter and the kitchen would host their first Thanksgiving. Then Jack’s phone rang. It was the title company calling to tell them they had an issue pop up post-closing that involved a $5000 lien on a prior owner. Jack and Kate’s immediate dreams came to a complete halt.
Situations like this happen all the time, whether it is pre-closing or post-closing. The best way to counteract pop up surprise issues like this is to proactively cover yourself and your family. Buying a home is one of the biggest investments you will take part of in your lifetime. Why wouldn’t you take all precautions in protecting your investment? Most people think that owner’s title insurance is not necessary on their home because it is a new build or just land. Think again. Owner’s Title Insurance does not just protect your home, it protects the property and the land the home is on as well. Home Warranties protect appliances, Homeowner’s Insurance protects the house, and Owner’s Title Insurance protects the property entirely. Protect what is yours.
Though Owner’s Title Insurance is optional, the practical thing to do is to purchase it when you buy your home. It is a one time fee that covers you throughout your entire ownership. For an investment that large that may be the home you own forever, do what makes the most sense. Some individuals may come forward and proclaim that title insurance is a rip-off because land records can be researched online, but what they don’t realize is that a lot of documents may be miscoded, have the wrong legal description, possible forgery, grammar issues, a lack of releases on prior mortgages, and the list goes on. Sure a title search on the property records can pull this, but how do you cover yourself on the issues that may arise? What if a document isn’t even recorded yet from the prior title company when you sell or buy your home? What if the neighbors built a deck that encroaches on your property – who will help you?
Jack and Kate remembered that their helpful realtor had advised them to buy owner’s title insurance at closing. They quickly called their underwriter to obtain their policy and submit a claim and the title insurance policy covered them against the prior lien of $5000. So instead of having to pay the $5000 lien on the prior owner and any attorney costs associated with the lien , they were able to submit a claim and get covered immediately through their policy. Jack and Kate then picked up where their dreams left off and he picked Kate up and walked her through the doors of their first home.
Title insurance will cover you and those pesky attorney costs affiliated with any legal issues that may arise on your property. Imagine having to cover an immense financial loss all because you opted out of purchasing a title insurance policy at closing. With coverage, your property is secure from any undisclosed defects that could potentially harm your future plans. Next time you go to buy or sell a property, double check if you are purchasing owner’s title insurance so your policy can come to your defense in a time of need. You may not be able to protect yourself from the “what is” but you can definitely protect yourself from the “what ifs.”
