Do I really need title insurance?
Title insurance can be purchased in many forms, subject to certain exceptions, and with endorsements for special circumstances. Title insurance provides assurance to interested parties that there is good and marketable title to the property being insured. However, does not mean that title insurance guarantees perfect title.
Exceptions to title are noted in the preliminary title report. These include specific exceptions listed on the property to be insured, as well as standard exceptions. One standard exception is that the insurance will only be provided for exceptions to title that are reflected by the public records.
Endorsements are available for an additional cost, which varies depending on the title company and the nature of the matter covered by the endorsement. A qualified attorney can consult with you on the endorsements available and advisable in your particular circumstance.
There are also different types of title insurance policies. Traditionally, the seller pays for standard coverage for the buyer that insures that the deed from the seller conveys title that as it purports to convey, subject to exceptions in the title report. An owner’s policy (usually purchased by the buyer), can provide additional protection against third party claims such as mechanic’s liens, the buyer can purchase an owner’s policy. If a commercial loan is involved, a lender’s policy specifically insures the lender against title defects.
