Title insurance is a safety insurance that protects lenders and homebuyers against financial losses or legal costs. Here are some points to consider why you need title insurance based from Investopedia.
A lender’s title insurance protects the lender against liability, which commonly is the mortgage, but it does not protect the buyer from possible title issues.
Owner’s title insurance is a protection for the homebuyer and this can help to cover charges of any future title issues. This type of policy is optional and only needs to be purchased once.
You can purchase a lender’s title insurance coverage from your chosen title company. Your lender or real estate agent may recommend a company, but it is still up to your decision to choose. If you pay cash or do not finance your home with a mortgage, there is no need to get a lender’s title insurance coverage.
Without lender’s title insurance, the homebuyer is completely accountable for the cost of unpaid taxes or any title difficulties. Similar to this, the owner’s title insurance protects the buyer from outstanding property taxes, unrecorded access rights, and other future title flaws.