What Happens if I Don't Have Title Insurance?

Buying a home is a significant financial commitment, and the associated expenses can quickly increase. In addition to the substantial down payment, prospective homeowners must navigate the often actual closing costs, which can significantly inflate the overall investment. Many individuals approaching homeownership explore various avenues to reduce these costs, and among the considerations for cost-cutting, title insurance frequently emerges as an attractive target for potential savings. After all, the question lingers: is this form of financial protection genuinely indispensable? Nonetheless, it is vital to emphasize that title insurance should not be skipped.

Title insurance is a crucial safeguard against possible legal and financial complications related to property ownership. It guarantees that you acquire a home with a clear and unencumbered title, shielding you from unforeseen claims, disputes, or encumbrances that could potentially jeopardize your investment. While the initial cost of title insurance may appear as an additional financial burden, it ultimately provides an invaluable layer of security and peace of mind, making it an integral component of a comprehensive and prudent homeownership strategy.

Who Pays for Title Insurance?

It depends on the state. In Virginia, it is customary for the purchaser to cover the expenses associated with title insurance, which come from the property's valuation. The cost includes:

• An owner's policy.

• Often amounting to a few hundred dollars.

• An additional charge for the lender's policy.

Property buyers in Virginia typically bear the cost of the lender's title insurance policy. Opting to secure both an owner's and a lender's policy concurrently during the property's settlement process often proves to be a more cost-effective approach. An owner's policy price is influenced by the buyer's choice between a 'standard' and an 'enhanced' policy. In contrast, the standard policy addresses pre-purchase risks, and the enhanced policy extends coverage to post-settlement risks, typically incurring an additional cost of around 20 percent compared to a standard policy.

I Thought That was Homeowners Insurance…

Homeowners insurance, known for its myriad benefits, differs from title insurance. This type of policy is a monthly, quarterly, or yearly payment. It provides comprehensive coverage to handle the expenses related to repairing or replacing your home and personal belongings in case of damage from specific risks. It encompasses various aspects, including the restoration of your possessions within your home and personal liability for bodily injuries or accidents involving visitors on your property. While homeowners insurance may extend to cover damages caused by natural disasters, it's important to note that the approach to such situations can vary by state. To enhance your coverage, it's possible to supplement a standard policy with additional options like earthquake or flood insurance. It's not the same!

The Closers Can Help

Based in Hampton Roads, Virginia, The Closers of Virginia, LLC has been serving the state's title insurance needs and related services for an extended duration. Our underwriting is managed by Stewart Title Insurance, headquartered in Newport News, Virginia. Stewart Title Insurance is a reputable and nationally recognized partner known for its innovative product offerings, flexible underwriting approach, competitive pricing, and steadfast commitment to integrity. Contact us with questions, or call 757-595-4707 for a quote today!