Why You Shouldn’t Pass On Owner’s Title Insurance

Buying a Knoxville home is a huge investment. For many people, it’s one of the largest expenses they’ll make in their lifetime. That said, you want to protect your investment. That’s where the owner’s title insurance comes in. Like anything else important in life, we insure the important things. We insure our health with health insurance. We insure our car with car insurance. And, we insure our home with homeowner’s insurance.

But, what does owner’s title insurance protect you from? In this post, we’ll explore why you shouldn’t pass on owner’s title insurance.

First: What Is Owner’s Title Insurance?

There are two types of title insurance, owner’s and lender’s. Title insurance protects against unknown title defects that could cause financial loss.

Lender’s title insurance is what protects a mortgage company when there is a loan on the property. It’s important to note that a lender’s title insurance policy only protects a lender.

Owner’s title insurance is what protects a buyer from potential losses due to title defects. It is a one-time premium that you pay at closing that protects you as long as you and your heirs own the property.

So, when you’re investing money into a home, owner’s title insurance is a small price to pay for protecting your ownership interest. Unfortunately, there are many times where buyers don’t know the importance of title insurance until it’s too late. Buyers don’t know how important it is until someone comes out of the woodwork saying they have a claim for the ownership or there’s a lien recorded against the property that should have been cleared up.

Why Do You Need It?

There’s a common misconception that if a title search is done, you don’t need owner’s title insurance. After all, shouldn’t a title search reveal any potential issues? Unfortunately, that’s not always the case.

Oftentimes, potential issues that could hurt your ownership interest don’t show up in the title search. That’s where title insurance comes into play. The key thing to remember here is that owner’s title insurance protects you against unknown defects.

Even when a title company does its job perfectly, there’s no predicting what potential defects could come to light after closing.

Here are just a few of the things that title insurance protects you against:

• Forged documents (deeds, mortgages, or releases)
• Deeds by someone who is incompetent
• Deeds given under fraud, undue influence or duress
• Prior mortgages
• Tax liens and other liens against prior owners
• Misrepresentation of wills, deeds, or other instruments
• Forged notaries

These are just a few of the ways that owner’s title insurance protects you. When you purchase title insurance, you can have peace of mind that your ownership interest is protected.

Are you thinking about buying a Knoxville home this year? Please let us know if there is any way that Knoxville Home Team can assist you. Rick can be reached at 865-696-9002 or via email at [email protected]. Kati can be reached at [email protected].