For most of us, buying a home is the largest and most important investment we will ever make in our lives. We will spend hundreds, even thousands, of dollars each and every year to protect our house and furnishings from fire and other disasters, but many people are reluctant to pay a small one-time fee to protect the most valuable part of home ownership – the ownership itself. An owner’s title insurance policy is a relatively inexpensive one-time cost that will do just that.
Owner’s title insurance protects the homeowner’s title, or legal ownership, of the property free from any unknown encumbrances. An encumbrance is anything that burdens the property, such as a lien or easement. While most encumbrances will be discovered during a thorough search of the public records at the local Registry of Deeds, many encumbrances cannot be determined by a title search. A few of the most common hidden risks that can cause loss of title or create an encumbrance on title are:
- False impersonation of the true owner of the property
- Forged deeds, releases or wills
- Undisclosed or missing heirs
- Instruments executed under invalid or expired power of attorney
- Mistakes in recording legal documents
- Misinterpretations of wills
- Deeds by persons of unsound mind
- Deeds by minors
- Deeds by persons supposedly single, but in fact married
- Liens for unpaid estate, inheritance, income or gift taxes
- Fraud
In the case of any defect such as these, the owner’s title insurance will pay for defending against any lawsuit attacking the owner’s title, and will either pay to clear up the title problems or pay the insured owner’s losses. The cost of an owner’s title insurance policy for an average home of $250,000, is only about $575. Compare that to the thousands, or tens of thousands, of dollars it will cost to hire an attorney to defend you in a lawsuit or repair the title defect, and it is easy to see why title insurance could be the best money you’ve ever spent in your life.
For more information about owner’s title insurance, contact Attorney Chris Ratté at ChrisRatte@RatteLaw.com.
