Owner's Title Insurance - An Easy Choice
Countless decisions go into purchasing a home: location, architectural style, neighborhood, moving date - the list goes on and on. One decision owners face when buying real estate is whether to purchase owner's title insurance.
While many choices in the home-buying process require much consideration, a decision about owner's title insurance should be one of the easiest. After all, if you buy insurance for your car, why wouldn't you insure what will most likely be the biggest investment you'll ever make?
Technically speaking, owner's title insurance is optional. But again, when trying to decide if you should protect the most important purchase in your life, the option is pretty clear.
Most people think of insurance as payment to protect from a future event - like when you buy car insurance to protect you from an accident that may happen in the future.
Title insurance is different. It protects your from future losses based on past events before you acquired the property. This can include a claim of easement, an encroachment or boundary line dispute, or a lien or claim that originated with a prior owner.
Now you may be asking, "shouldn't those issues be found before I buy my home?" The easy answer is yes - because otherwise you wouldn't be signing at our closing table! A title search will produce the liens and any prior issues associated with a property as well as utility easements; however, it won't reveal a person's claim of easement to walk across the property.
In addition, because Georgia law provides no judicial oversight of any foreclosure action, the title exam may not reveal if the foreclosed-upon prior owner has an objection to the foreclosure and intends to assert it as some point in the future.
Chicago Title Insurance Company puts it best, saying "title insurance is issued after a careful examination of copies of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search."
Buyers may also be hesitant to purchase insurance because they think the home they are buying is in a safe, well-designed neighborhood and the "title should be fine." But just because there is an established HOA in a settled neighborhood doesn't mean that issues can't come up in the future.
What if the contractor built the home on the wrong footprint, and now the driveway extends 6 feet onto the adjacent lot? The HOA could have approved the build without thinking too much of it, but now the owner of the adjacent lot wants to build on his property, which is where your driveway sits!
The great thing about an owner's title insurance policy is that there is a one time premium. The premium is paid at the time of closing, and then that's it for as long as you own the property.
The great thing about an owner's title insurance policy is that there is a one time premium. The premium is paid at the time of closing, and then that's it for as long as you own the property.
No, owner's title insurance is not required, but for the lender, it is. And their insurance only protects the lender, and offers nothing to the homeowner. The lender purchases title insurance for every single property, and if they feel that it is so important to protect that property, why wouldn't you?
An owner's title insurance policy is one you hope to never need - but when you do, it is invaluable. We at Perrie & Associates have great relations with several title insurance companies, and strongly suggest owner's purchase a policy to protect their greatest investment!
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