Don’t Need Owner’s Title Insurance? Think Again

Sep 1, 2016 | Buying A Home, Closing Process, Owner's Policy, Title Insurance

Before you say no to owner’s title insurance, it’s important that you know what you’re giving up.

Many buyers will opt out of purchasing owner’s title insurance in order to save a little money. Unfortunately, many of these buyers don’t understand the importance of an owner’s policy when they buy a Knoxville home. Many buyers often say they don’t need an owner’s policy for the wrong reasons.

In this post, we’ll cover some of the common misconceptions about owner’s title insurance and why owner’s title insurance is always important, regardless of the property you’re buying.

“I’m getting title insurance.”

When you buy a Knoxville home and get a loan, you’ll be required to get lender’s title insurance. Contrary to what many buyers may believe, lender’s title insurance is not the same as owner’s title insurance. Lender’s title insurance is there to protect the lender, not the owner of the property. Lender’s title insurance only lasts as long as there is a loan on the property, while owner’s title insurance lasts as long as an owner owns the property.

If you want to ensure your ownership interest is protected, you’ll want to buy owner’s title insurance. The good news is that when you purchase owner’s and lender’s title insurance at the same time, you’re often given a discount on your owner’s policy.

“Isn’t that what a title search is for?”

When you purchase a home in Knoxville, a title search is completed. Typically, a 30 year search is done to ensure that a seller is able to convey clear title to a property.

A title search will examine the chain of title, the legal description, check for judgements and liens, and make sure taxes are paid, among many other things. Based on that, a title company will issue a commitment that they are able to issue title insurance.

Even with the most thorough title search, things can be missed. This is why owner’s title insurance is so important. Owner’s title insurance protects against things that may have be missed in the title search.

“The home is less than a year old.”

This is a common misconception for many buyers. The age of a house has nothing to do with the ownership of a property. Even if a house is new, someone has owned the land for many years. Issues with unpaid taxes, judgements and liens, fraud, among many other things can still hurt the ownership interest of land.

The age of a home has nothing to do with whether or not potential issues could arise with the ownership of a property. When you buy a new home, someone has owned the land for many years, so you’re not any less likely to experience a title issue.

“It’s just a land.”

When you buy land, it’s still an investment. Vacant land can come with its own set of issues including boundary line disputes, improperly recorded documents, or issues with easements and restrictions.

While owning land may not be as large of a financial investment as a home, it’s still something you own and want to protect.

“I plan on selling the home soon.”

Some buyers will opt out of buying owner’s title insurance if they’re not planning on owning the home long. This is particularly true for investors who plan on fixing a property and flipping it quickly. These buyers often reason that if they’re not going to own the property long, it’s not worth investing in an owner’s title insurance policy.

Regardless of how long you own a home, an owner’s title insurance policy is important. An owner’s policy protects you against things that have happened in the past. There is no saying what can come to light between when you buy the property and when you decide to sell it.

For those investors who buy foreclosures, this is even more so true. There are many foreclosures that are handled carelessly and have many title issues are not addressed along the way.

“The sellers have owned the home for a long time.”

Finally, many buyers will improperly assume that if a home has been in a family for a long time, there are automatically no potential issues. The amount of time a home has been owned has no bearing on whether or not it can come with potential issues. A home that has been in a family for a long time can still come with its share of estate disputes, liens, unpaid taxes, and other title defects.

Don’t fool yourself into believing that a long history ownerships guarantees safety. The only way to protect yourself against the unknown is an owner’s title insurance policy.

Bottom Line: Protect Yourself

Owner’s title insurance is a one time premium you pay when you buy a Knoxville home. It protects you against things that have happened in the past that could affect your ownership interest in a property. It’s best to protect yourself from the unknown, instead of regretting it later.

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

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.