For most of us, buying a home is the largest investment we will ever make in our lives. We will spend hundreds, even thousands, of dollars each year to protect our home from fire and other disasters, but many people are reluctant to pay a small one-time fee to protect the most valuable part of homeownership – the ownership itself.
An owner’s title insurance policy is a relatively inexpensive one-time cost that will do just that.
Owner’s title insurance protects the homeowner’s title, or legal ownership, of the property free from any unknown encumbrances. An encumbrance is anything that burdens the property, such as a lien or easement. While most encumbrances will be discovered during a thorough search of the public records at the local Registry of Deeds, many encumbrances cannot be determined by a title search.
Some of the most common defects are:
- Forged Deeds
- Missing heirs
- Mistakes in legal documents.
In the case of any such defect in title, the owner’s title insurance will pay for an attorney to defend against any lawsuit attacking the owner’s title, and will either pay to clear up the title problems or pay the insured owner’s losses.