When purchasing a house, there are many things to consider. Purchasers spend their time trying to find matching appliances, negotiating prices, and waiting on approvals. Title insurance, however, is often not something buyers think about much. Surveys have shown it is actually currently more popular than ever, and on a steady rise. So what is it?
In the same way that car insurance protects your car and medical insurance protects your health, title insurance protects your home’s title. If title insurance is selected in your contract, it triggers an extensive title search. The purpose of this search is to make sure the seller has the valid, legal right to sell the house, and no surprises will pop up that could dispute the seller’s claim to ownership. As long as that search comes back affirmative, title insurance means that an insurance company has verified that you legally own the house and that they will protect you from anyone who may attempt to dispute that fact.
There are actually two types of title insurance, which are sometimes confusingly referred to with the same name. These are the two types:
- Title insurance for lenders is a verification that the seller had the legal right to sell the house and an insurance company is willing to defend the accuracy of that claim.
- Title insurance for homeowners is a verification of the buyer’s investment in the legal sale of the house.
Unlike most other insurances, title insurance is paid in one lump sum up front, not in monthly installments. It is not legally required for a sale, but it is becoming more common than ever before. It helps protect the house from claims of public record error, fraud, or omitted heirs that would dispute the seller’s right to sell it and the buyer’s right to purchase it.
When it is involved, it is typical for a contract to ask the buyer to pay for title insurance for lenders and give them the option to pay for title insurance for homeowners. At first glance, the lender requirement may make more sense than the homeowner option. After all, if someone did raise a legal claim against your house, it would be against the lender that sold it, rather than you for unknowingly purchasing an invalid house. However, title insurance for homeowners protects your actual claim to the house in the event of a legal issue. If a legal issue did arise against the title, the ruling may be that the house was not the seller’s to sell in the first place, so you cannot legally own it. Title insurance for homeowners protects you against that.
Title insurance may infrequently be called into question, but it is better to have it and be safe than be sorry if anything were to come up. For any questions, contact Velazquez Consumer Law, LLC today. We provide solutions and shield you from surprises!

Velazquez Consumer Law
