Common Misconceptions About Title Insurance

Most people know little to nothing about title insurance. You’ll never deal with title insurance if you don’t buy a home. Title insurance is designed to protect you in case there are problems with the transfer of the title or deed. It is required by most lenders, so you will definitely have to purchase title insurance. Here are some misconceptions that you need to be aware of.

I don’t need an owner’s policy.

The title insurance policy you purchase for your lender does not protect you personally. That policy only covers the lender and your loan. If there is a problem with the title, the lender is protected from losses. If you, too, want to be protected, you need to also buy an owner’s policy. The owner’s policy protects you for as long as you own the home.

Title insurance protects against delays.

Title insurance protects you from losses, but it does not protect you from delays in a home sale. If a title defect arises, it must be settled by the title insurance company on your behalf before the sale of the home can be finalized.

Refinancing doesn’t require title insurance.

While your owner’s policy covers you as long as you own the home, the lender’s policy only covers the lender with whom you got your original mortgage. If you refinance, your lender may or may not require title insurance as well.

Title insurance isn’t important.

This couldn’t be further from the truth. If you do not get title insurance and something comes up preventing the transfer of the deed, it could derail your home sale or purchase and cause you to lose a significant amount of money. Not only is title insurance as important as other types of insurance, it is potentially more so because of the large investment you are protecting.

If you are in need of title insurance, contact us today for more information.