If you recently bought a home, you will have to take care of any paperwork, including insurance. As you purchase a home or property, a document termed “title” defines the right of ownership to that home or property. This Title is protected by Title insurance against any others who may try to claim ownership. While this title insurance will cover either a mortgage lender or a homeowner, you may have to pay for both of them during the closing deal. Keep reading to know more about the importance of title insurance.

Title Insurance:

A title insurance policy compensates the policyholder if there is an issue with the Title of the property. Even with the highest precision, the deed records will not ensure accuracy in recording them. It implies that there are possibilities for a person to claim ownership rights to your newly bought property if there are proofs of any previous frauds. Hence, title insurance will safeguard you by paying all the costs for saving your title rights or even if you lose it.

A title insurance policy covers either a mortgage lender or homeowner of that property. While the Lenders make it mandatory to pay for title insurance as a part of closing costs, homeowners’ title insurance is optional but must be paid by the buyer or seller. The title insurance coverage starts as you buy the insurance policy and ranges infinitely into the past. This will cover all the changes of titles mentioned in the records for that property.

While you will have to mandatorily buy lenders insurance as a part of the mortgage process, it is always safe to purchase homeowner’s title insurance for guaranteed protection. Several people are familiar with other types of insurance related to vehicles, medical, life, etc., that cover for events that are yet to occur. But title insurance provides coverage for events linked to the Title that has already happened. You can get peace of mind from previous frauds, forgeries, or legal costs across different situations.

What will title insurance cover?

Title insurance covers various situations related to fraud, misdeed, etc., related to the Title. The below conditions could be the best point for you to get a claim on a title insurance policy:

  • Errors in the public record: The record keepers at the respective state authorities may commit any mistake during the title recording process, making it to hide any previous liens during the new title search.
  • Omitted heirs: This is a situation where a legally entitled heir did not get a chance, but they will still have rights to the property.
  • Unidentified liens: This is when the past owner has not paid any property-related taxes or other pending payments for any works, etc.
  • Fraud: Here, a past owner may have forged the signature or edited any records related to the property.

What is the importance of having title insurance?

  • Even though the lender’s title insurance is the only mandatory element, it is always suggested to buy the homeowner’s title insurance as well to safeguard the rights to the Title. Below are some instances of issues that can come up and can be avoided by purchasing title insurance from an expert insurance provider:
  • If you take a home loan to buy the home, then lenders will require a title insurance policy. But in case of the seller does not buy the owner’s title insurance, then you may be responsible for any hidden issues arising in later stages. Imagine a situation where the previous homeowner has never paid the worker for an activity carried out on the property. If any legal fees are outstanding, then as a homeowner, you will be able to pay them from your pocket. Having title insurance can save you from this mishap while compensating for all the monetary losses.
  • Another situation where you might have bought the property from a person who had inherited it from his father. But after some days, you may come to know that this person had a hidden step-brother who has the rights of ownership to some portion of the property as per the will. There are chances that he may claim his portion of rights to the property. AT this time, title insurance will pay for all the legal costs for resolving the title issues.  
  • Imagine you bought a house but later found that the seller had a pending bill on a renovation carried out. This pending lien may exist from a previous date of the mortgage. Not having title insurance will make you pay this pending lien or face the consequences.
  • There are chances of some portion of the property being inaccessible because of surveying errors. Since the record of the property is different than expected making, the value of the property is impacted in present times. Having title insurance will compensate for this monetary loss.
  • Title issues after the closure of the deal may lead to bigger problems in the future if you neglect to buy title insurance. Since the property purchase payment could be your highest transaction during your lifetime, it is key to safeguard it optimally. If you are looking to buy any property, then make sure to tell the seller about purchasing title insurance for you from a reliable title insurance company. It is crucial to saving you from any fraudulent activities that may have occurred in the past to haunt you in the future.


Even with closing lawyers’ best expertise and due diligence, there may be hidden title issues that may be uncovered in the later stages. For most of them, purchasing a property could be the biggest investment that you may make in your lifetime, making it essential to get a title insurance policy. If you want peace of mind, associate with a leading title insurance company like Utah Title to ensure financial safety related to title issues in later stages.

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