Can You Buy Title Insurance After Closing?
If you’re wondering whether you can buy title insurance after closing, the answer might be a little bit more complicated than you were anticipating. Rather than a simple “yes” or “no,” the answer is: it depends. Here’s what you need to know.
Owner’s Title Insurance vs. Lender’s Title Insurance
What makes the answer complicated is that there are two types of title insurance when it comes to property: owner’s title insurance and lender’s title insurance.
When you are purchasing a property that will have a mortgage, your lender will require you to purchase title insurance—this is lender’s title insurance. Although you will be paying for the policy at closing, it actually doesn’t protect you as the buyer. Instead, it provides protection for your bank or mortgage company. This title insurance policy ensures that if someone makes a claim to the title of the property you’ve just bought, your lender will not suffer any financial loss. Lenders require title insurance to reduce the risks involved in financing real estate transactions.
Owner’s title insurance is a policy that protects you as a property owner. Unlike lender’s title insurance, which is required by lenders, owner’s title insurance is optional. It serves the same function as lender’s title insurance, but rather than protecting your bank or mortgage company, it protects you from the losses you might suffer as a result of a claim to your title. These losses include legal fees, settlement costs, or even the value of your home should it be determined that the other party has a valid claim.
So, Can You Buy Title Insurance After Closing?
Lender’s title insurance is required in order to close on a property; a lender won’t finance a purchase without having title insurance in place, so purchasing after closing isn’t an option.
When it comes to owner’s title insurance, you can purchase anytime after closing. There’s no time limit when it comes to purchasing owner’s title insurance. If you are paying for your home in cash, it’s clear why owner’s title insurance is an investment worth making, but even with a mortgage, you’ll want to have the peace of mind that owner’s title insurance offers.
Should You Buy Title Insurance at Closing?
While you can buy owner’s title insurance at any time, it’s recommended that you purchase it at closing. If you wait, you’re at risk for the days, weeks, or months between your closing and when you decide to take out an owner’s title insurance policy. That means if there’s a claim against your title, you would be responsible for the financial losses incurred.
It’s also a good idea to buy title insurance at closing because by purchasing both lender’s title insurance and owner’s title insurance at the same time, you’ll pay less.
Learn More About Buying Title Insurance
If you’re buying a home or property, you should consider also purchasing an owner’s title insurance policy for your peace of mind and security. Contact us today at 833-331-8476 to learn more about title insurance and how American Guardian Title can protect you, your family, and your property.