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What is Owner’s Title Insurance? Do I Need It?

owner's title insurance

Owner’s Title Insurance offers essential protection against the unknown.  Legally, it is not required, but let the buyer beware…

What is Owner’s Title Insurance?

An Owner’s Title Policy provides a home buyer with assurance that their title company will stand behind them in the event that a covered title problem arises after settlement. An Owner’s Title Insurance Policy, (Owner’s Policy), is usually available when you purchase real estate and protects you for as long as you or your heirs have an interest in the property.

Unlike a Lender’s Title Insurance Policy, in Pennsylvania the owner’s title insurance policy is optional and typically paid for by the buyer.

What does Owner’s Title Insurance protect against?

Sometimes title problems occur that could not be found in the public records or are inadvertently missed while completing the title search. To help protect you in these events, we recommend that you obtain an Owner’s Title Insurance Policy.

A few examples of these events might be:

  • Unsatisfied mortgages or judgments created by a previous owner
  • Mistakes in examining records
  • Forgery or undisclosed heirs
  • Unpaid real estate or inheritance taxes

For covered claims, the Owner’s Title Insurance Policy covers both monetary damages and/or the cost for a legal defense to protect your ownership interest in the property.

How much does Owners Title Insurance Cost?

The cost of the Owner’s Policy is typically based upon the purchase price of the home, and the amount is a one-time fee paid at closing.

You have two separate policy options, the Standard Owner’s Policy and the Enhanced Homeowner’s Policy. Add a 10% premium to the standard rate in your state to determine the cost of the Enhanced Policy. A few things to consider before opting for the enhanced coverage:

  1. The Enhanced Policy has strict policy limitations and deductibles
  2. Your lender does not require that you purchase an Enhanced Policy to insure their interests
  3. Approximately 85% of the higher premium for the enhanced coverage is paid to the person selling it to you.
  4. Be sure to review the additional coverage being offered to determine if it’s necessary for your property.

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