Everything You Need to Know About Title Insurance Policies
Most homeowners need to buy title insurance policies, but despite this, many people still aren’t exactly sure what title insurance is for and why their mortgage lenders require it. Below, we’ll answer some of the most frequently asked questions about title insurance policies in 2020.
What Is Title Insurance and Why Do You Need It?
This is such a common question that we’ve written an entire post about why title insurance is needed. In short, when you purchase a property, you’re purchasing the title to it. Other parties may also have claims to this title—should they step forward after you purchase the property and claim rights to it, title insurance protects your lender (or you, in the case of owner’s title insurance) from financial loss. Although this rarely occurs, it’s not unheard of—because lenders do large amounts of business, they require homeowners to take out title insurance policies for their protection.
Do I Really Need Owner’s Title Insurance?
No, you don’t need owner’s title insurance—it’s not required by lenders, so it’s up to you whether you decide to also get an owner’s title insurance policy. That said, it’s a good idea for your peace of mind. Like all insurance policies, you might not think that you’d need it, but if you do, you’ll be happy that you have it. Without owner’s title insurance, you will be responsible for paying court costs, legal fees, and any settlements awarded.
How Long Is Title Insurance Good For?
Lender’s title insurance policies last until you have paid off your mortgage. As long as your lender has some stake in your property, they will be covered by title insurance. If you get an owner’s title insurance policy, it lasts for as long as you or your heirs own your property.
How Much Does Title Insurance Usually Cost?
The cost of title insurance depends on the value of your home. It can also vary depending on the state where you’re located. The average cost is $1000.
Can I Buy Owner’s Title Insurance After Closing?
Absolutely. You don’t need to buy an owner’s title insurance policy at the same time as your closing like you do with lender’s title insurance. It can be purchased at any time, although the premium is greater after closing.
Are Title Insurance Fees Negotiable?
The premiums for title insurance are regulated by the state, but the fees may be negotiable. In a buyer’s market, you may also be able to ask your seller to cover the costs of your title insurance.
Can I Shop for Title Insurance?
Yes, not only can you shop for title insurance, you should shop for title insurance! Many homebuyers simply use the title insurance company recommended by their realtor or lender without giving it a second thought, but it’s a good idea to shop around and get quotes from a few different title insurance providers.
Get a Title Insurance Policy Today
American Guardian Title is a boutique title company that provides individualized services and innovative processes to make purchasing title insurance policies simple. Contact us today to get a title insurance policy quote.