What to Know Before Buying Owner’s Title Insurance

what to know before buying owner's title insurance

Read on to learn what you should know before buying owner’s title insurance.

Whether you are buying or refinancing a home, you can opt to buy a particular insurance policy known as owner’s title insurance. Many people choose to skip the extra expense, without realizing what protection they are missing out on. It’s a mistake to dismiss buying owner’s title insurance before knowing what this insurance can provide. Read on to learn three things you should know before you purchase your owner’s title insurance. 

What Owner’s Title Insurance Is

Title insurance is a policy placed on the deed of your home, which protects you from challenges to your homeownership. With home or auto insurance, you buy coverage for events that may happen in the future. With title insurance, you purchase coverage for events from the past that may disrupt your future. 

There are two types of title insurance: lender’s and owner’s. Lender’s title insurance protects the lender’s investment, while owner’s title insurance protects the owner’s investment. Although buying owner’s title insurance is not required, you will lose significant time and money defending yourself against claims to your property if you don’t have it. 

What Owner’s Title Insurance Protects You From

What are the kinds of claims that arise and threaten your homeownership? These problems can include: 

  • Disagreement about properly lines
  • Disputes about whether the seller had the right to sell to you
  • Undisclosed liens or lawsuits against the property
  • Undisclosed heirs coming forward and claiming ownership

These situations can arise unpredictably and require you to spend quite a lot of money for your defense. By buying owner’s title insurance, you know that you have insurance money ready to help your defense in these situations. 

Who Pays for Owner’s Title Insurance

The question of who pays for the owner’s title insurance varies state by state and sometimes county by county. In some cases, it is the seller’s responsibility, and in others, it is the owner’s responsibility. In other states, whoever pays for owner’s title insurance is negotiable, or the cost may be divided. 

Your local title company will be able to advise you on whether you or the seller should be buying owner’s title insurance. 

A Title Company You Can Trust: Colony Title

At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, and LinkedIn.

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