What is Title Insurance?

Jon Shibley, President & CEO, Lenox Financial

Protect Your Equity Position

Title insurance is basically in place to protect your equity position in the property. You are going to have an owner’s title policy and a lender’s title policy.

Example

Let’s say that you build your house in a subdivision and the lawyer goes back and searches the title for 50 years and everything comes back okay. Then some guy shows up and says that it was his grandfather’s land 75 years ago, and that he has been living in Europe and all these houses (including yours) are on his land.

The Lenders Title Policy

A lender’s title policy will protect you so you don’t have to pay back that loan. This insurance comes in and protects the lender.

The Owners Title Policy

An owner’s title policy is the only thing that you have to protect the equity in your house. If you are putting very little money down, it may not be necessary to get an owner’s title policy, but if you are putting a lot of money down, it may be a good idea to have one to protect the equity that you have in the house. If you have an owner’s policy, you are always protected no matter how many times you refinance. A lender’s policy has to be re-done every time you get a new lender.