Why Insure the Title to Your Home?
When you buy a house, you’re buying more than the structure and the property it sits on. You are also buying its legal history, as it is identified in the title. If there’s a problem with the title that was never uncovered during the closing, such as a lien on the property, that problem is now yours.
The Role of Title Insurance
Title insurance insures parties against loss resulting from matters affecting title to real property. Title insurance companies evaluate the history of the property and insure that nothing in the history of the title will result in a loss to the insured. Unlike other forms of insurance, title insurance is paid for by a single, one-time premium at the time the property is acquired.
Title Insurance for Your Lender vs. Title Insurance for You
Most mortgage lenders require people to purchase a title insurance policy in the lender’s name. That policy is called the Mortgagee Policy and it is required to insure the validity of the mortgage as a lien on your property. But the policy you buy for the lender does not protect you. Owners desiring title protection must purchase a separate policy insuring their interests. The title insurance policy you buy for yourself is the Owner Policy.
The Case for Title Insurance
The issues outlined in this brochure explain why title insurance is important from a legal standpoint. But there’s another, equally important reason for purchasing a title insurance policy: peace of mind. With title insurance you can feel secure, knowing that you’re protected from unforeseen circumstances.
CATIC’s title insurance brochures are available online (PDF) or you may request the pamphlets by contacting the VATC office.