The Importance of Owner's Title Insurance when Purchasing Real Estate

Owner’s title insurance is a type of insurance policy that specifically protects an property owner’s right to the land he or she purchases and owns. In the United States, there are numerous reasons to have this type of coverage, especially since land ownership is not always done properly, and records may not be accurate on all fronts. Having this type of title insurance when purchasing real estate can help ensure the best interests of the individual are maintained.

How Owner’s Title Insurance Works

The property owner purchases owner’s title insurance at the time of the real estate transaction. This type of insurance protects the buyer from any claims against the title at a later time. Title searches are part of the process of purchasing a home. These title searches examine the past transactions on the property, looking for any indication that the property has changed hands without proper documentation. For example, if an original owner of the property passed away, there may be heirs with a right to that property. A cleared property records search means that no evidence of title problems has occurred.

Nevertheless, errors can happen. Years after the property changes hands, errors or other title problems can occur. However, when title insurance is in place, the risks to the property owner are minimized. Title insurance can protect the property buyer in numerous situations, such as:

• Ensuring the title is clear on the property
• Forgery and fraud protection
• Incorrect signatures on documents
• Encumbrances or judgments against the property
• Restrictive covenants
• Defective recordation

Stepped up coverage may also include several other benefits such as:

• Building permit violations from previous owners are protected
• Living trusts
• Subdivision maps
• Structure damage from mineral extractions
• Covenant violations from other owners of the property
• Forgeries after the insurance is issued
• Encroachments after the insurance is issued

The goal of title insurance is to protect the property owner from claims on the property. In many cases, it is critical to have this type of protection whenever purchasing a home. There is no guarantee that property records will provide all of the necessary details but insurance can help.

Hire an Attorney

In any situation where property is changing hands, it is critical to have an attorney. The attorney can help ensure that the new property owners are not responsible for any of the previous liens, judgments or other limitations on the property previously. In addition, an attorney can help the property purchasers to determine if title insurance is necessary or a good option for their particular needs.