Many real estate investors want to know whether or not they need to purchase an owner’s title insurance policy for their property. When most people invest in real estate, their ultimate goal is to recoup their investment (and more) when they sell. Having an owner’s title insurance policy will give you the assurance that your claim to your investment (the property) will remain intact. In this article, we will talk about the various benefits of purchasing an owner’s title insurance policy.
Clearing up Title Issues Before Closing
One of the biggest benefits of having an owner’s title insurance policy is the clearing up of potential title issues prior to closing. According to the American Land Title Association (ALTA) roughly 25% of title examinations reveal a title issue that is then cleared up before closing. Your title insurance company will do an in-depth title search, and look at the historical real estate records of your property. If any problems are discovered, they will be resolved before you go to close on your property.
While this title search and examination catches the majority of potential issues that may arise with title, there may be other problems that slip through the cracks during a title search, including:
Forgery and Fraud
Ineffective Conveyance Documents
Liens for unpaid estate, inheritance, income, or gift taxes
These items can pose a serious threat to your title, especially if you don’t have an owner’s title insurance policy.
Defending You Against Title Claims
If you have an owner’s title insurance policy and any such claim does arise after closing, your title insurance will pay to resolve the issue. This may include paying any legal fees associated with defending the title claim, fixing the title problem itself, and also paying losses to the insured.