Home purchasers have two choices for assuring title:
1) a lawyer’s opinion on title or 2) title insurance.
What is title insurance? Title Insurance protects your ownership interest of your property from losses incurred as a result of unknown title defects or other covered matters that exist at the time of your purchase but are unknown to you at that time. Title insurance allows purchasers and lenders to “insure over” selected problems, rather than insisting on a repair of the problem. It may reduce the legal bill of the purchaser or mortgagor, since certain searches may be waived by the title insurer.
While title insurance is technically optional, few proceed without it, because without title insurance, a number of additional costly searches must be done and these cost almost as much as the title insurance. In addition, title insurance provides coverages not available without title insurance. Without title insurance, you would still be covered by our and omissions insurance, but only for matters which arise due to negligence. Many risks not caused by negligence are covered by title insurance, such as the existence of work orders, lack of building permits, zoning infractions and title fraud risks.
In most instances, if you are financing your purchase with a mortgage, title insurance will be a mandatory requirement.