Buying real estate title insurance is not necessary but it is highly recommended. Title insurance is a type of indemnity insurance that protects the bearer from financial losses that arise from claims against the property or challenges to ownership. Here are important reasons why you should get the insurance:
To protect your investment
An investment in any property will mean a substantial outlay of capitol. When a rival claim to the property emerges, and is found to be valid, you may lose your investment. Real estate title insurance protects against financial loss.
To ensure a title search
All transactions involving property are noted in public records. Before an insurance company issues a title insurance policy, it conducts a thorough title search using these public records. While it is possible for you to do your own title search, a title insurance company has the resources and the professionals to carry out a more in-depth review. When you buy title insurance, you are protected from any errors made in the search.
To get a mortgage
Having title insurance is usually a requirement when securing a mortgage. This ensures the mortgage company is protected because a threat to the ownership also jeopardizes their stake in the property.
To show there are no claims
Real estate title insurance can also be purchased by the owner of the property to show there are no liens against the property and the ownership is clear.