Should You Get Title Insurance?

If you’re planning on buying a home, you may have heard of title insurance but might not be sure exactly what it is, or why you should get it. The “title” is your ownership to land, and title insurance protects your ownership of the land against fraud, encroachment and other problems that impact your clear ownership of the property. While it’s not required by law, many people are choosing to purchase it. Here’s what you should consider when deciding if it’s right for you.

It gives broader coverage. Depending on the policy, title insurance will usually provide more coverage than the opinion of a solicitor or notary about your title. In addition to this, it also protects against fraud relating to your property, and any losses that could occur relating to your ownership of the property. Compared to only getting a survey done of your land, title insurance gives you more protection against potential problems with your claim to the land.

It provides comfort for a one-time fee. Purchasing title insurance is only a one-time premium, usually based on the value of your home. With this one-time payment, you are protected against any potential depletion of value that is caused by fraud, survey errors, or previously undisclosed liens that are left on the property from the previous owner. Many title insurance policies also provide coverage for the cost of defense in the event there is a challenge against your title. The amount of coverage that you receive allows homeowners peace of mind in case any of these issues do arise.

It doesn‘t protect against everything. While title insurance covers things to do with your ownership of the property, there are many things it doesn’t cover, and it definitely doesn’t replace home insurance. Title insurance won’t cover any zoning violations that you create, things that aren’t listed in public records like unrecorded liens, environmental hazards, or defects you knew about the property before buying.

There‘s a difference between owner‘s and lender‘s title insurance. Both exist, and there’s a big difference. If you only have lender’s title insurance, you are not protected against losses related to your property, only the lender, such as a bank, is protected against these losses. Some banks will require you to get lender’s title insurance before approving your mortgage, but owner’s title insurance you usually have to take care of yourself. Make sure you know which you have before signing the paperwork.