When purchasing a home, buying title insurance is very important. In fact, it is so standard that if you are getting a loan on that home, your lender will most likely require it.
So I’ve told you that you need it, but before understanding why it’s important you must first understand what it is. The Wikipedia definition of title insurance is “A form of indemnity insurance predominantly found in the United States which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans.”
In summary, if anyone makes a mistake, misses something, or there was just an unforeseeable issue in the process of searching the records of your property, with title insurance you have protection in case of a loss.
A loss resulting from a title defect could be as much as the value of your home. Because of the potentially large dollar amount of the defect, many homeowners would be unable to financially cover the loss. Even if one could afford it, no one would want to. For most people, their home is the most expensive purchase they can make and having the peace of mind of title insurance is a must.
You are probably thinking “If the Title Company made an error that led to a title issue with my home, then shouldn’t they be responsible?” That is a natural question to ask, but human error is always present and title fees aren’t that much. No title company could charge you $300-$400 for the processing of your transaction and be able to afford a mistake in the hundreds of thousands of dollars. One mistake would put them out of business. It is because of this, that title insurance not only exists but is the right decision for most, if not all homeowners.
If you have questions about title insurance or anything related to the title of the property you own or are considering buying, let the experts at 7 Title give you the answers you need.