Why Home Buyers Should Consider Buying Title Insurance

An attorney from East Rockaway, New York, Marc Rovner serves as the general counsel and director of business development for Beta Abstract, LLC, a multimillion-dollar title insurance company. Attorney Marc Rovner teaches about real estate title insurance in Continuing Legal Education offerings.

Real estate title insurance protects home buyers from future losses that may arise from adverse claims such as liens, obligations or debts that the home buyer did not create. Conditions such as this preclude home buyers from fully enjoying the benefits of homeownership, such as using the property as a pledge for a loan.

Typically, title insurance comes in the buyer’s policy and the lender’s policy, assuming that the buyer purchases the property with a mortgage loan. The lender’s policy is used by the mortgagee to cover legal defense costs and other incidental expenses from someone else’s claim. The buyer’s policy covers the home buyer’s legal fees.

Before issuing a title insurance policy, insurance companies normally perform a title search. Public records concerning the property are combed for wills, decrees, trusts, deeds, court judgments, bankruptcy filings, and similar documents. These defects are settled through the title insurance before the home buyer closes the deal.