Title insurance is one of those things, like most insurance plans, that you most certainly don’t need, that is until you actually need it.

Whether or not it is actually necessary to purchase is a question that is constantly posed to San Diego real estate agents. While it seems like a yes or no question, the answer isn’t as easy as that.

What Exactly is Title Insurance?

Title insurance protects you in the event that a lien or any type of property rights claim is brought against you on the basis of your ownership of a house.

You may have followed all the procedures required by law to acquire your house, but if the person who sold it to you did not have the right to do so, then your purchase of the house wasn’t entirely legal.

For Example

Let’s say that you purchased a 150 year old house from an owner (person C) who purchased it from someone else (person B) ten years before you bought it. Let’s also say that person B purchased the house from person A fifty years before that.

Now, if person A had somehow illegally acquired the house or doesn’t own the land in which it was built on, that means that person A was never the rightful owner of the house. Since person A was not the rightful owner of the house, he or she did not have the right to sell it to person B, who did not have the right to sell it to person C.

This means that person C did not have the right to sell it to you, and even though you paid for it, you may not be the rightful owner of the house.

Title insurance protects you against losses that you could sustain if such a claim is brought against you.

So Is it Really Necessary?

It sounds like the possibility of this happening is small, but we unfortunately do live in a litigious society, and the costs of legal fees can wreck havoc on people if a claim is brought against them. In the end, it’s a piece of mind that may be worth it to have, but the choice is entirely up to you.

Some things that you may want to consider before buying title insurance are:

● The amount of times the house has changed ownership (the more times a house has been sold, the greater the chances are that a claim could be brought against you).

● The age of the house (once again, the older the house is, the more likely there might be a disputed claim somewhere down the line).

● What the particular title insurance covers (which can vary quite a bit, meaning you can shop around for better coverage or reduced rates).

Expert Advice You Can Count On

Even though you understand a bit more about title insurance now, you should still discuss your options with a realtor before you close on a house. At Metro San Diego Realty, we have the expertise that can make your home buying experience a breeze. Contact us today to find the right home for you.

Posted by Jason Coriano on
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