An owner’s title insurance policy protects the financial interest of a real estate owner should there be a challenge to his ownership. For instance, what if a deed were recorded incorrectly at the courthouse and public records showed two owners for the same piece of land? Yeah, there’d be a day in court for that and one day in court can be very expensive, especially if you have to pay the lawyer yourself! That’s where a title insurance policy protects your financial interest—it pays all legal expenses in the defense of your property ownership.
Title insurance coverage is unique because it reaches both forwards and backwards simultaneously to protect you.
It is good from the day you purchased it backwards. It covers everything that happened before your purchase, including all unforeseen title flaws, and it pays litigation should someone challenge your ownership through a lien, claim, or taxes. Whether or not someone has the right to challenge you, you still have to prove your ownership in a court of law, and that can be cost prohibitive.
For a one-time fee at closing, you can buy an owner’s title insurance policy that insures you into the future, even protecting you after you sell that property through all past hidden claims. Don’t throw away that title insurance policy! Because the contracts and the new title insurance of the buyer require you to convey with warranties, you become responsible for anything that has ever transacted on the property.
Title Insurance is an inexpensive way to protect your now and your future from the flaws of the past.