Is Title Insurance Necessary?
Published on Wednesday, 01 June 2011 08:14 Written by Lawrence D. Brudy & Associates, Inc.
“Why do I need title insurance?”
It’s a common question posed by our clients who are trying to save as much money as possible when buying their home. This is an understandable sentiment. But doing without title insurance is, in effect, a risky cutting of corners. In representing sellers, I have often heard the wrong answer, usually from a “Notary Only Closer” who is on hand only to notarize the signatures of all parties and who has no idea why title insurance is important.
Indeed—why title insurance?
The correct answer, of course, is that not only can defects in title occur, but you can never be too sure about the person at the end of the table who “assures” you that you are getting clear title. In fact, this could be the same person who, instead of paying off the seller’s mortgage, has decided to make continuing monthly payments and deposit the buyer’s loan proceeds into his or her bank account. It could be the person who didn’t make monthly payments at all, but instead pocketed the full amount of the buyer’s loan and is now living in a foreign country. Or it could just be that defects in the title have gone unnoticed by the title company or were not of record to begin with.
Title issues sometimes occur when a document is not found in the public records or is inadvertently missed in the title search.
An owner's policy of title insurance protects and insures you against such unforeseen problems as forgery on documents, mistakes by the searcher, undisclosed heirs entitled to a share in the property, and errors and omissions on deeds. An owner's policy provides assurance that your title company will stand behind you if a covered title problem arises after you buy your home, and will be there to help pay valid claims and cover the costs of defending an attack on your title. The owner's policy protects you for as long as you or your heirs have an interest in the property.
Contact Darcy M. Dayton, Esquire, at This e-mail address is being protected from spambots. You need JavaScript enabled to view it. for more information