• Debbie Ferraro

What Is Owner's Title Insurance and Do I Need It?

Owner’s title insurance is something you rarely think about—until you’re buying a home. When you purchase a property, you’ll always be expected to purchase title insurance to protect your lender, unless you’re paying for the purchase in cash. Then, you’ll also have the option to purchase owner’s title insurance. Is it worth it? And what is owner’s title insurance, anyway?

The Purpose of Owner’s Title Insurance

First, let’s back up a bit. When you purchase a property, what you’re really purchasing is its title—the ability to occupy and use it as you like (and as is legal). In very rare circumstances, another party may claim that they also have title to a property. It could be an heir, the government, previous owner, or someone who holds a lien. Title insurance protects your lender if this happens—they’ve made an investment in your property and if someone else has a valid claim, they could potentially lose the investment. This is why lenders make title insurance a requirement.

Owner’s title insurance serves the same purpose, with the difference being that it protects you rather than your lender. Even if you’re paying for your property in cash and you don’t need to buy lender’s title insurance, you may still want to purchase owner’s title insurance to protect yourself from financial loss. Like lender’s title insurance, owner’s title insurance is paid with a one-time payment rather than ongoing or monthly payments like other forms of insurance.

Do I Need an Owner’s Title Insurance Policy?

You’ve already purchased the required lender’s title insurance—why buy owner’s title insurance too? This is the attitude most people have and it’s the reason why so many opt not to buy owner’s title insurance. After all, you’ve already done your due diligence to make sure there are no claims or title defects before making your purchase—what are the odds that there’s something else out there that could cause you to lose your property?

Well, as a title insurance company, we can tell you: the odds aren’t as great as you might think. It’s very rare for claims and title defects to occur, but it’s not unheard of and that’s why owner’s title insurance is good to have. Should you lose your property, you would also lose your down payment and all of your equity in the home. It can be devastating and it can happen years or even decades after you’ve purchased your property.

When you have owner’s title insurance, all of your legal fees related to the claim on your property will be covered by the insurer, up to the policy limit. Should you lose your property, your title insurance company will make you whole so you can take your down payment and equity and use it to purchase a new home.

Like all insurance, having owner’s title insurance helps give you peace of mind and offers protection should you need it.

Get Owner’s Title Insurance Today

American Guardian Title is a boutique title company that provides individualized services and innovative processes to make purchasing owner’s title insurance quick and easy. Contact us today to get an owner’s title insurance policy quote.