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Protect yourself with title insurance or a warranty

On Behalf of | Oct 2, 2020 | Real Estate Law

If you’re buying a new home, one thing you should have is title insurance. Title insurance covers any issues with the home that the title company doesn’t catch during the home-buying process. For example, if you find out that there were filing errors, back taxes due, liens or unknown heirs to a property, then your title insurance can help cover the cost of handling a dispute.

There are two main kinds of title insurance that you may be offered, including:

  • A warranty of title
  • Owner’s title insurance

What is the difference between these types of coverage?

A warranty of title is what you can get if you are purchasing a home with cash and don’t necessarily need title insurance. The seller can be asked to give you a warranty on the title, which states that they have the right to sell the property to you.

Owner’s title insurance is different, as it protects you in the case that anyone makes a claim of ownership over the property. While you may not have to have this insurance to complete your home purchase, it’s a good idea to have it in case of later disputes.

Not everyone is required to have title insurance, and if your lender doesn’t require it, you may wonder if it’s worth getting. Keep in mind that any liens or claims could be your responsibility if you don’t have insurance to cover you during a dispute. It’s better to be protected with insurance than to find out later that you’re going to have to deal with mistakes made during the home-buying process, some of which could be costly.