About 20% of homebuyers each year skip owner's title insurance, leaving their equity exposed to hidden title problems that can surface after closing, such as undiscovered tax liens, forged signatures, recording errors, undisclosed easements, and claims by missing heirs. Owner's title insurance protects your property rights against these threats for a low, one-time fee.

Key facts

  • Roughly 20% of homebuyers each year go without owner's title insurance and remain exposed to financial risk.
  • A lender's policy protects only the loan, not your equity, so a lender's policy alone leaves your ownership unprotected.
  • Owner's title insurance is a one-time fee that covers you for as long as you or your family own the home.
  • Title Resources Inc. is locally owned, has served clients since 2005, and has closed over 10,000 titles.

What threats can appear after closing?

During the closing process, your title professional helps transition the home from the seller to you by examining public records. If a problem is discovered, the title professional generally works to resolve it before you purchase the home. According to the American Land Title Association, title professionals find and fix issues in roughly one in three transactions.

Even after a title search and purchase, problems can still arise that threaten your ownership. Examples include:

  • Undiscovered tax liens
  • Forged signatures in the chain of title
  • Recording errors
  • Undisclosed easements
  • Title claims by missing heirs or ex-spouses

Owner's title insurance protects your property rights from threats like these.

Can a title problem really cost you your home?

Yes. A family in Missouri unknowingly purchased their home from a seller who had taken out a separate $419,000 loan on the property. That loan was not discovered during closing, and the family's lender paid the seller directly instead of paying off the existing debt.

Soon the family faced foreclosure because someone else held a claim against their title. Fortunately, they had owner's title insurance, so the title company paid the debt and the family kept their home and their peace of mind. Without that policy, they could have faced serious costs and even eviction.

How do you protect yourself?

There are two types of title insurance: lender's title insurance and owner's title insurance. Lender's title insurance is required by most lenders because it protects their loan investment, and you usually purchase it as the homebuyer. If you only have a lender's policy, your equity is not protected, so your property rights could be taken away if someone else has a claim to your home.

Owner's title insurance protects your property rights from the legal and financial threats described in the story above. That is why millions of homebuyers each year make the smart decision to buy it. It is a low, one-time fee that provides peace of mind for as long as you or your family own your home. In many areas the seller purchases the policy for you, so ask your title professional how it is handled in your area.

Common questions about owner's title insurance and title risk

Doesn't a title search catch every problem?

No. A title search uncovers many known issues in the public record, but some defects are undiscoverable at closing, including forged signatures, recording errors, and unknown heirs. Owner's title insurance protects you against covered defects the search cannot find.

If my lender is protected, why do I need my own policy?

A lender's policy only covers the mortgage balance, not the equity you have built. If a covered claim arises and you have only a lender's policy, your investment is unprotected. An owner's policy defends your ownership rights and can pay legal fees to fight a claim.

Who pays for owner's title insurance?

It varies by region. In many areas the seller buys the owner's policy for the buyer, while in others the buyer pays. Ask your title professional how it is handled in your state so there are no surprises at closing.

How long does owner's title insurance last?

Owner's title insurance is a one-time purchase that lasts for as long as you or your family own the home. It never renews and never expires while you hold the property. That is why it can defend against defects that predate your purchase.

Title Resources Inc. (The Title Guy) helps homebuyers sleep well by protecting their property rights. Call (636) 527-9670 or email orders@TitleResourcesInc.com, or start your order at titleresourcesinc.com/order-title/.