Benefits of Title Insurance And How To Use It

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By Rochford Law Posted on April 14, 2022 at 11:07 AM

Can you imagine moving into your new home, or purchasing a rental property, only to find out that someone else owns the property, too? If it wasn’t for title insurance, this might be a common occurrence! Title insurance is a good investment because of this simple fact: Property ownership disputes, both valid and not, can arise at any time – before and after a sale is complete. 

Like the name suggests, title insurance protects a property owner in the event that a third-party makes a claim on the property. An example might be someone who files a lawsuit claiming a right to your property, but the title insurance would defend you against the suit. 

Real estate transactions generally require you to purchase title insurance. But if you’re new to buying property, it might be helpful to know the various ways you can use it and reap the benefits. 

Ensure your Nashville property title is clear with the title and closing services of Rochford Law & Real Estate Title.

How Does Title Insurance Benefit Me? 

There are two main types of title insurance policies, depending on who it is protecting: an owner or a lender. Both can defend and benefit you in different ways. 

Owner’s Title Insurance

This type of insurance policy protects a homebuyer or property owner, specifically. It safeguards you financially and legally when you purchase property, from taxes and bills that went unpaid by a former lien to conflicting wills and inheritance disputes. 

As a homebuyer, you can freely choose which title insurance company you prefer to use. It is a one-time fee rather than a recurring expense and is according to your property’s purchase price. In some cases, your property seller might even pay for your policy.

Lender’s Title Insurance

A lender’s title insurance policy, on the other hand, protects the mortgage company when you purchase or refinance property with their help and ensures the lender has a clear claim on the property. You are required to purchase a lender’s title insurance policy as a part of your closing costs when you refinance or buy a home; the cost of the policy is based on the loan amount. 

While lender’s title insurance doesn’t necessarily benefit you, if you bought property from a fraudulent seller that previously went unnoticed, then the title company will contend that you don’t have to continue paying the mortgage or fear foreclosure. 

Other Specific Benefits of Title Insurance

Defends Against Lawsuits

One specific way a title insurance policy works on your behalf is financially buffering you against lawsuits in regards to your property. While there are a number of legal scenarios a title insurance policy could come into play, here are a few examples it would protect against:

  • Fraud or forgery 
  • Conflicting wills and documentation errors
  • Violations or unpaid bills by a previous owner (liens)
  • A spouse claiming they didn’t approve the sale
  • Encroachments, boundary disputes, or property survey errors

Ensures A Clear Title

In any real estate transaction, it never hurts to be thorough from the beginning. A professional title company can provide both insurance policies and quality research to investigate any liens or other mortgages associated with the property before you close on it. If the title search does unearth any conflicts, the title company can try to resolve them.

Protects Your Investment

Whether you are a homeowner, realtor, developer, or lender, your investment in property is an asset worth protecting. If you expect to make a real estate transaction, title insurance offers a peace of mind that your investment will not be lost if another lien stakes a claim. It can pay-off a lien staking a claim, a mortgage, or taxes. It can even protect your ability to sell the property if a problem turns up during a later title search.   

Put Your Title Insurance to Work

Get title insurance and other real estate protection services from a title company you can trust in Nashville! Contact Rochford Law & Real Estate Title today.