People ask us all the time,
“Why should I purchase title insurance?”
“Do I really need title insurance?”
Buying a home is most likely the biggest investment you will ever make. It is also probably the most expensive purchase you will ever make. So why anyone would ever consider NOT purchasing title insurance is crazy! We purchase life insurance, car insurance, pet insurance, health insurance, dental insurance, insurance for our phones etc. We pay yearly and/or monthly premiums without thinking twice. We wouldn't consider NOT owning homeowners’ insurance (which protects us against the cost of physical damage to our home) and we pay a hefty annual premium for it too. No questions asked.
The interesting thing about the title to our homes is…it CAN be defective. Believe it or not, builders have built houses on the wrong parcel of land, owners have forged documents, bogus mortgage releases have been filed, judgments have been missed when searching the title or have been indexed incorrectly among the land records, deeds have been filed with clerical and typographical errors or properties have been transferred by the wrong parties making them invalid. The list of possible title defects is endless. There are years and years and years of transactions for every parcel of land. And these transactions have involved all kinds of people who, at anytime, can make a mistake or, even worse, intentionally commit fraud or wrong doing.
“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe”
~ Albert Einstein
That being said, because of the Title Insurance industry, regulations and standards have been created that help diminish fraud and/or human error, making title defects few and far between. Hooray, Hooray! (patting ourselves on our backs here). However, it just takes one and, if you are anything like Charlie Brown…it’s your property that is the one with the problem.
Title Insurance is a ONE time premium you pay at the time of purchase. It is effective the entire time you own your home. Most attorney fees are covered if you need to fight a claim. In addition, it provides you with a reissue rate, meaning if you refinance your home at anytime, you will get a discount on the Lender’s Title Insurance that is required by most lenders. That’s another thing—if the lenders require it, shouldn't you?
For the cost, Title Insurance is a no brainer. It is what insurance SHOULD be. It can protect you in most cases of fraud, errors and omissions and it is relatively inexpensive. You buy the insurance ONE time and you have a policy....period.
So our answer is this: You buy insurance, of any kind, as protection; protection against a loss that would result in a large, unforeseen expense. Protecting the title to your home (probably your largest investment) is a must! So we highly recommend buying it at settlement so you don't wake up one day to find there's a title problem and you end up paying thousands of dollars and spending countless hours trying to correct it. Whaa Whaa….Charlie Brown.