The Value of an Owner’s Policy of Title Insurance

For many people, their home is the most valuable asset they own.  Someday, the equity in your home may be used to finance retirement or other significant but necessary expenses of life. 

At the time of closing, both sides pay for title insurance but most people do not understand why.  A buyer receives an Owner’s Policy.  It is an insurance policy typically issued for the amount paid for the purchase.  The premium is paid one time at the closing and insures the property for all acts which occurred on or before the date of closing.  The Owner’s Policy will protect you should a covered title issue ever materialize in the future: problems such as errors or omissions  in the verbiage of the deed; forgery; undisclosed heirs; prior owner judgments; prior owner mortgages; unpaid real estate taxes to name just a few. 

These issues can present themselves in the future when you look to refinance and/or sell the property.  Do not worry.  Possession of an Owner’s Policy will allow for easy title clearance of these existing exceptions.  In addition, should any party come out of the wood work and claim an interest in your home, your Owner’s Policy will protect you against any such claims. 

You should always keep the document copies given to you at closing, especially the Owner’s Policy.  They can save you a lot of time and trouble in the future and can help assure you that you will be able to sell your home easily when the time comes.