Title insurance is an insurance policy (like car insurance or homeowners’ insurance) that guarantees against loss and damage due to impediments to the title. As a part of our closing process, our attorneys conduct a title search to look for such problems. We generally search back to the industry standard of 30 years; however, if we locate a prior title insurance policy, we can update from that issuance date and get our clients a discounted rate on their title insurance.
If someone makes a claim against your property or a defect is discovered when you sell or refinance, the title insurance company will generally cover any damages against you and also pay for legal fees to defend an action. Even if the claim or action that someone files against you does not succeed, without title insurance, you would be on the hook for paying an attorney to defend that action.
Purchasing real estate may be the largest investment of your life and it is critical to have this coverage. Our office generally requires buyers to obtain title insurance. If there is a loan/mortgage, the lender is almost always going to require a title insurance policy for them too.
The price of the title insurance policy is based on standardized rates centered on the equity ownership. That means that adding an owner policy to the lender’s required title insurance may be very minimal if you are borrowing the majority of the funds to purchase the property