Updated: Apr 25
During the home buying process, a thorough title search is done by title examiners to ensure that there are no issues with the title - and that the seller has a right to sell it.
Once this is complete, the title company will offer you two title insurance policies - one to protect you and one to protect your lender. That way if a title defect arises after you take ownership of your property, the title insurance shields you from unforeseen financial loss and legal expenses associated with resolving the title issue. Generally, lender’s title coverage is required to close on your mortgage loan. Owner’s coverage is optional but should be purchased. For a small, one-time premium on the largest purchase of someone's life, it is a no-brainer to purchase an owner’s title insurance policy.
What is a Title Insurance Claim?
A title claim is when someone files a claim against your property because they believe they have some sort of ownership interest in it. This could be a prior lienholder, a missing heir, or even a neighbor with a property boundary dispute. When you have title insurance, the issue at hand will be resolved with minimal inconvenience to you. This may mean paying off an old debt or hiring a lawyer to address any legal issue. If the new owner has any actual monetary loss or damage due to a covered risk, the title insurance company will defend the insured’s interest or reimburse the insured for loss, subject to any policy exclusions and exceptions.
Each scenario is different, but when a claim arises you either feel grateful you purchased an owner’s title insurance policy or you cover all the legal expenses to hash out the issue in court.
How Often is Title Insurance Used?
Title insurance is not used as commonly as other types of insurance policies, such as car insurance or health insurance. In fact, many people have had title insurance policies for decades - and have never filed a single claim.
So, then why even bother investing in title insurance?
It only takes one title issue to make the title insurance policy worth it. After all, this one title issue could put you at risk of losing your home. That is a big price to pay because you decided to avoid paying a one-time premium for an owner’s title insurance policy.
Title Insurance at Conestoga Title
At Conestoga Title, our team of title experts have years of experience handling all-things-title-insurance. It is so important to remember that it only takes one perceived title defect to change everything.
If you find yourself questioning whether or not owner’s title insurance is worth the expense, contact us today at 800-732-3555. We are here to answer any questions you may have and address any concerns about title insurance.