Buying a home in Tennessee involves more than receiving the keys. Understanding owner’s title insurance can help you make an informed decision about protecting your investment.
Here are seven reasons to consider an owner’s policy before closing.
1. It protects your interest as the homeowner
A lender’s title insurance policy protects the lender’s interest in your mortgage. An owner’s policy provides separate protection for your financial investment against covered title claims.
2. Some title problems are difficult to discover
A title search reviews the property’s ownership history and public records. However, issues such as forged documents or errors in earlier deeds may remain undiscovered. Owner’s title insurance can provide protection against covered defects that existed before you purchased the property.
3. Past debts can affect your ownership
Unpaid property taxes or certain unpaid contractor bills from a previous owner can create claims against the property. An owner’s policy may protect you against covered losses arising from these earlier obligations.
4. Covered claims can include legal defense
Responding to a title dispute can involve legal expenses. For covered claims, an owner’s policy can provide a defense and payment of covered losses, subject to its terms and conditions.
5. Cash buyers have an investment to protect
Buying without a mortgage does not eliminate the possibility of a title problem. Even without a lender requiring insurance, a cash buyer can purchase an owner’s policy to help protect the investment in the property.
6. The premium is generally paid once
Owner’s title insurance generally involves a one-time premium paid at closing, rather than monthly or annual renewal payments. Ask for a quote for your transaction so you understand the coverage and cost.
7. Protection can continue after closing
An owner’s policy generally remains in effect while you retain an ownership interest in the insured property, subject to the policy’s conditions. Covered problems from the property’s past may surface well after closing.
Understand your policy before closing
Coverage depends on the policy issued, including its exclusions, exceptions, limits, and endorsements. Review these details and ask questions before making your decision.
Three Rivers Title helps buyers in Waverly and surrounding Tennessee communities understand the title and closing process. Contact our team or call 931-264-4640 to discuss your upcoming purchase.