The Nightmare Situation that Proves You Need Title Insurance

Title insurance may not be as widely understood as health insurance or car insurance, but it is equally as important for homeowners to secure. Far too many homeowners have found themselves navigating tricky and potentially disastrous situations that only title insurance can resolve.

Title Insurance: Protection For Your Purchase

Unlike health insurance that requires a monthly fee in order to maintain coverage for potential future problems, title insurance involves a single charge, usually around $1,000, to ensure the legitimacy of your home before you buy. A title company will complete thorough research to ensure that the title to your future property can rightfully become yours and that no conflicts exist that would prevent the sale from going through. Common problems that occur include unpaid taxes, judgements, and ownership disputes that place the title of the home into question. Assuming the title company finds that the title is valid, you will receive a legal document stating the validity of the title you are purchasing. This document protects you from any financial loss in the future if an unrealized title conflict arises.

Nightmare Situation

Purchasing and moving into a new house is something to be celebrated, but many homebuyers in America have struggled through title conflicts that threatened their entire investment. Sometimes these title issues don’t become evident until after the home has been sold, at which point title insurance comes to the rescue. This is exactly what Lori Moore and her husband learned when they bought a home in Louisville, Kentucky.

“We had barely gotten everything settled in the house when two weeks later we received a letter from an attorney about an existing lien on the house against the prior owner that now carried over to us as the new owners,” Lori Moore explained. The Moores investigated and learned that the county clerk had filed the lien incorrectly, causing it to elude the original title search before they purchased the home. Unfortunately, the Moores then also learned that they only purchased a title insurance policy that covered their lender, not themselves. This left them with a $2,000 lien and attorney costs to cover out of pocket. They could barely afford it, and had that lien been $20,000 instead of $2,000, the Moores  very easily could have lost their brand new home.

It is for this reason and many more that every homebuyer needs to purchase a lender’s title insurance policy as well as an owner’s title insurance policy. The insurance brings security and comfort by safeguarding against any of life’s unpleasant surprises.