With over 20 years of experience in the title insurance industry, Jen Lutgen of Watermark Title Agency has seen firsthand how critical title insurance is for homebuyers and owners. Many don’t fully understand what title insurance covers or why they need it. Lutgen aims to explain the critical facts about title insurance so consumers can make informed decisions when purchasing a home.Â
What is Title Insurance?
Title insurance protects against defects or legal issues that could impact the ownership claim to a property. It covers problems that occurred before purchase, not just issues arising during the current transaction.
Title insurance protects against:
– Undiscovered liens against the property
– Invalid or forged documents
– Unknown heirs claiming ownershipÂ
– Mistakes in public records
This coverage helps defend the buyer’s ownership claim and pays legal fees or damages if they lose property rights due to a covered title defect. It also pays to correct or resolve title problems.
Why You Need Owner’s Title Insurance
Lutgen strongly advises purchasers to get owner’s coverage because it protects their most significant investment against the unexpected. Owner’s title insurance protects the buyer’s legal ownership for as long as they or their heirs hold the property. Title issues can arise even decades later. The one-time premium is inexpensive compared to lifelong protection.
Without owner’s title insurance, the buyer could incur significant legal expenses if an issue emerges. Just hiring an attorney to defend their rights could cost thousands. Lutgen cautions buyers against risking their investment over a small title policy premium.
How Title Insurance WorksÂ
Before closing, the title company performs a title search to trace the property’s ownership history. They examine deeds, mortgages, surveys, liens, and tax records to identify potential title defects.Â
If the title company finds an issue, they work to clear it before closing so the buyer receives a clean title from the seller. Any clouds on the title discovered after closing would be covered under the title insurance policy.
The title insurer would handle legal proceedings, pay expenses to defend the buyer’s rights, and provide financial compensation if they lose ownership due to a covered claim.
Choosing a Title Company
Lutgen recommends selecting an established, reputable title agency with strong financial backing and underwriting. She advises against choosing a title company based solely on the cheapest rate. Lower premiums typically mean less thorough title research and reduced protection. However, the most expensive insurance isn’t necessarily better either. The ideal partner offers comprehensive coverage at a competitive price.
Lutgen emphasizes that title insurance is critical for defending your property rights. Don’t gamble with your most valuable asset over a minor insurance expense.
If you want to reach out to Jen directly with questions, start here: https://www.wmtitle.com/our-team/
