Owner's title insurance is optional and only available when you purchase your home. A title insurance policy will protect the homeowner from claims against the ownership of the home. This valuable insurance protects the homeowner and is a one-time fee with no ongoing expense. The cost ranges from $500 to $3000, depending on the home’s sales price.
A dispute against an owner's title can arise for several reasons:
- Owed taxes from the previous homeowner
- Errors in county filing
- Inconsistencies or conflicts regarding a will
- Undocumented easements of the property line
- Forgeries on title
- Liens- Contractor bills, and unpaid equity lines of credit
Let's look closely at an example. You purchase a brand-new home from a builder. What can go wrong here? Let's say the builder did not pay the landscaper for the sod they put down the day before closing. Two weeks later they placed a contractor's lien on your property. Or the new home is adjacent to a farm. The farm owner files a claiming part of your yard is his property.
There are two types of title insurance. The one that is mandatory is lender’s insurance. The lender will mandate this to cover the interests of the lender. The owner's policy is optional. In this writer's opinion, owner's insurance should be mandatory considering you have zero control over some of these items popping up. This policy covers you the entire time you own your home.
Written by: Patricia Eubanks, VP SouthPoint Financial Services