Title insurance is a type of protection that both consumers and businesses can agree on. It is a form of indemnity insurance that protects both sides from defects in a property title. Without this paperwork in place, the risk of owning property becomes unimaginable.
Why It Matters
Extra protection is always a plus when a lot of money is involved. Sunnyside Title agency has handled several cases where small details make a large difference. Lenders and homebuyers have an obligation to protect their assets at all times. That is where title insurance becomes a priority for both sides, although it isn’t mandatory for homebuyers. But like all things related to insurance, when you don’t have it is when something will actually go wrong. It is better to have a plan in place when that happens instead of hoping something bad doesn’t happen.
Optional, But Not Really
A lender will jump into title insurance without a second thought. On their side, it is a requirement that protects their assets from possible title issues. Although the same benefits apply to homeowners, title insurance remains an optional choice. There are many reasons a potential homeowner would choose to go without title coverage, and none of them are justifiable. There is a similar argument made for full coverage car insurance vs. liability only. When your car is totaled, your insurance choice makes the difference between getting another car or walking away with nothing. The most significant consequence of not having title insurance leads to you losing your home for nothing. Now imagine a day where someone loses their house and car for being cheap with insurance options.
Title insurance protects you from paying a debt that isn’t yours. There are many times where a lien can be placed on the title before it gets transferred to your name. This makes you financially responsible for the previous owner’s mistake. It also makes it impossible to sell the home without dealing with a problem that isn’t yours. Title insurance is your friend, and can assume financial responsibility for these obvious mistakes. A lot of time can pass before a policy changes hands to the rightful owner. Mistakes can be made in that timeframe, and it may take years for you to figure out the damage.
It May Cost You Nothing
Title insurance is heavily regulated around the world, so trying to go for the best price isn’t always the best option. It’s like getting the cheapest home insurance available in a hurricane area but missing hurricane coverage. Most companies have similar rates, with the icing on the cake being available options. Since this is a longtime contract and homebuyers need to protect themselves, consider asking the seller to pay for your contract. This is not an unusual request since no one wants to deal with title issues multiple years after a sale is made. Always ask about concessions when the only penalty is a hard no.
Not having title insurance will lead to problems that no one should have to deal with. Protect your home and assets by doing the exact same thing as the lenders. It is a win-win situation where everyone gets what they want without any risks.