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What is Title Insurance and Why do you need it?

Updated: Dec 19, 2018

The median home value in the United States has increased by $16,000 over the last 12 months, according to data released by Zillow. But home values are not the only items enjoying growth. Title insurance, a $15 billion industry, is also forecasted to continue growing through 2020. It’s clear more homeowners are electing to choose title insurance, and you too should understand the fundamentals and importance of title insurance for your home purchase.

What is title insurance?

Traditional insurance policies protect insureds against future losses. For example, a car insurance policy will protect the driver from future accidents, and a health insurance policy will protect an insured from future health problems. However, title insurance is different because it protects insureds against claims for past occurrences.

Who does title insurance protect?

Two different types of title insurance exist. A real estate owner can choose to purchase title insurance and lenders require you to do so as well. Lenders will require title insurance by mortgagors in order to secure their security interest in the property. Furthermore, a property owner will purchase title insurance to protect their investment in their property.

What type of protection does title insurance provide?

Title insurance will require an extensive title search of the property. This search will minimize the potential liability to the property owners by discovering any foreseeable title issues. However, once a property owner purchases and takes possession of a property, title insurance will defend against any litigation that challenges the validity and legality of the new property owner.

How much does title insurance cost?

Unlike traditional insurance companies where monthly payments are required, title insurance only requires a one-time payment. This insurance will vary according to the price on your home, the mortgage amount and according to the state that you will purchase a home. If you want a more detailed estimate on your home, feel free to give us a call.

Original blog post by Forbes


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