How Many Types Of Title Insurance Are There?

Obtaining title insurance is a wise decision when buying a home or any other type of property. If this is the first time you’ve bought property, you understandably may have questions about this topic.

Perhaps you’d like to know exactly how many types of title insurance there are. Familiarizing yourself with the various types of title insurance that may be available can help you begin the process of finding a policy that’s right for you.

What Is The Purpose Of Title Insurance?

Before learning about the major types of title insurance you could purchase, you should learn more about the role title insurance plays in a transaction. Basically, title insurance offers financial protection to those involved in real estate transactions by ensuring that defects with the title of a property don’t impact them.

For example, maybe the individual claiming to be the property’s owner is actually committing fraud. The real owner may thus take legal action after you’ve already bought the property. In these circumstances, title insurance can protect you from incurring losses.

That’s just one example of a situation in which title insurance might prove beneficial. The best way to learn more about the various ways title insurance may protect you is to speak with an expert and go over your policy options in greater detail.

Understanding The Two Main Types Of Title Insurance

The following are the two general forms title insurance may come in:

• Lender’s Title Insurance: This form of title insurance guards against a lender incurring any losses as a result of defects with a property’s title. Often, a lender will require a potential loan recipient to purchase lender’s title insurance before approving a loan. A new lender may also require a buyer to purchase a new title insurance policy if the buyer is refinancing their mortgage.

• Owner’s Title Insurance (or Buyer’s Title Insurance): Owner’s title insurance protects the individual buying a property. A policy will usually cover the property’s entire purchase price, although it’s always wise to review a policy to confirm such details. This type of title insurance policy guards against losses resulting from such defects as liens, encumbrances, and related issues.

Although buying a lender’s title insurance policy may be unavoidable, some people assume that because there is no requirement that they buy an owner’s title insurance policy, doing so isn’t necessary.

This is an understandable impulse. When buying a property, your goal may be to save money however you can. Not buying a non-mandatory insurance policy could appear to be a simple way to reduce expenses. However, this could be a costly error.

The Importance Of Buying An Owner’s Title Insurance Policy

Buying an owner’s title insurance policy is a wise investment to make. If you fail to buy a policy protecting yourself, you could be at risk if incurring significant financial losses due to title defects of which you are likely unaware.

That doesn’t need to happen. With a thorough owner’s title insurance policy, you’ll enjoy much greater peace of mind both during and after the purchase of your new property.

At The Closers, offering lender’s title insurance policies and owner’s title insurance policies in Virginia, our experts are on hand to help you find the ideal policy for your goals. We offer assistance with both commercial and residential transactions, tailoring our services for each customer. Get started today by contacting us online or calling us at (757) 595-4707 to discuss your options.