Why should I buy title insurance?

We get asked this question a lot.

First, let’s explain what is title. Title is the legal right of ownership to something. It can be for an automobile or property.

When buying a house, you will often be asked if you want a title search. (By the way, you do.) A title search will research the history of ownership of the property and verify that the person selling you the property legally holds the title to it, and can sell it to you. It also finds liens attached to the property like Mortgages or Judgements.

Now, a standard title search covers 40 years of history for the property, so in 2023, a title search would go back to 1983 to verify all the documentation is in order. But what if the house you are buying was built in 1938? That’s what title insurance covers. Title Insurance covers the life of the house, before you owned and during the time you own the property.

But who cares about who owned it when it was built? Why does that matter for my title? Well let’s say Sheila Doe comes around and says, “my gramma was the daughter of that owner that used to own your house, and I have here a will that says my gramma got the house and she gave it to me!” Well, if she’s not blowing smoke, you’ll end up in court trying to figure out if it’s a legitimate claim on your property. And as we all know, court costs get expensive. Title Insurance will pay all of the court costs and attorneys fees to defend your title to your house.

Well what are the chances someone will come along and lay claim to your property? Probably pretty small. But you buy hazard insurance in case your house burns down, right? Small chance there too. In both instances, you could lose your house, and with title insurance costing only a few hundred dollars for the life you own the property, it’s peace of mind, it’s insurance. It protects your investment.

So say “yes” to the title search, and say “yes” to the title insurance policy.