Get the Facts on Title Insurance
Owner’s Title Insurance offers essential protection against old liens, judgments and property disputes.
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 a one-time premium paid at settlement 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 problems arise because title issues were not detected in the public records or were inadvertently missed during the title search. An Owner’s title insurance policy protects the new homeowner against third-party claims that pop up after settlement.
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
- Other federal & municipal liens
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 Owner's Title Insurance Cost
The cost of the Owner’s Policy is based upon the purchase price of the home, and the premium 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:
- The Enhanced Policy has strict policy limitations and deductibles
- Your lender does not require that you purchase an Enhanced Policy to insure their interests
- Approximately 85% of the higher premium for the enhanced coverage is paid to the person selling it to you.
- Be sure to review the additional coverage being offered to determine if it’s necessary for your property.