Why Your First Knoxville Home Needs Owner’s Title Insurance

Jul 20, 2016 | Buying A Home, Closing Process, Owner's Policy, Title Insurance

Picture this:  you’ve purchase your first home, move in, start decorating, and the place finally begins to feel like home. A few weeks later,  you receive a startling phone call from someone claiming they are the true owner of the property. The caller goes into detail about how someone committed fraud and didn’t have the legal right to sell the property. As you find out, the so-called seller forged documents and committed fraud at closing. After talking to your attorney, you find out the home doesn’t belong to you since the real seller didn’t sign off on closing documents.

This may seem like a far fetched story, but scenarios like this happen all the time. So, what can you do as a buyer to protect yourself from situations like this?

It’s as simple as this: purchase owner’s title insurance. In this post, we’ll take a closer look at what owner’s title insurance is, why you need it, and how it protects you.

Title Insurance: More Than Just Another Form Of Insurance

You buy homeowner’s insurance, car insurance, life insurance, and health insurance. After paying for a house, it can seem like owner’s title insurance is just an unnecessary expense that only protects from things that never happen.

However, title insurance protects you against much more than you may realize. Title insurance is a bit different from other types of insurance because it protects you against things that happened in the past. In comparison, homeowner’s insurance or car insurance protects you against things that may happen in the future.

Unlike other insurance premiums, title insurance is a one time premium you pay at closing. Once you’ve purchased owner’s title insurance, it protects you and your heirs for as long as you own the property.

Lender’s Title Insurance Vs. Owner’s Title Insurance

There are two different types of title insurance: lender’s and owner’s. These two types of insurance are different and serve to protect different people.

Here is a definition of each:

Lender’s title insurance protects a lender should any problem arise involving the title of a property. If you have a loan on the property, you will be required to purchase lender’s title insurance. Once a loan is paid off, the lender’s title insurance ends.

Owner’s title insurance, in contrast, protects a homeowner should any problem arise with involving the title of a property. Owner’s title insurance is not required when you buy a home, however, it is important you understand what you’re giving up if you opt not to buy it. Owner’s title insurance remains in effect so long as you or your heirs own the property.

What Does Owner’s Title Insurance Protect You Against?

When you buy a home, a title examination is done on a property to ensure that that clear title can be conveyed at closing. Unfortunately, even with the most thorough title examination, not all title issues can be revealed by simply doing a title search. Owner’s title insurance is there to protect you against unknown, unforeseeable situations having to due with a property’s title.

Here are just a few of the things that owner’s title insurance protects you against:

  • Fraud
  • Forgery
  • Unknown Heirs
  • Items Missed During Title Exam
  • Improperly Recorded Documents
  • Deeds Conveyed By Minors
  • Improper Legal Descriptions
  • Errors In Tax Records
  • Unknown Liens
  • Illegal Deeds
  • Boundary Or Survey Disputes

Again, these are just a few of the items that are protected under an owner’s title insurance policy. In addition, an owner’s title insurance would also pay for legal and attorney fees should you need to go to court over an issue.

Bottom Line: Owner’s Title Insurance Is More Than Just Another Closing Cost

Owner’s title insurance is much more than just another thing you pay at closing. It helps protect one of your largest investments by protecting your ownership interest. Even when everyone does their job properly, people can lie and do bad things. It’s best to protect you and your home from these issues.

Are you in the process of buying or selling a home in the Knoxville area? Title Group would love to assist you in any way possible.  You can reach us at 865-392-5801 or via email at orders@titlegroupoftn.com.

Title Group of Tennessee is a full service Knoxville title company. We specialize in Knox, Sevier, Loudon, Blount, Jefferson, and surrounding counties. Title Group of Tennessee is ALTA Best Practices Certified since September 30, 2015.