Home title insurance is an insurance policy that indemnifies you and your lender against any problems in regard to your home’s title before the date of the policy.  Home title insurance guarantees that no one forged a signature in a past title transfer.  Home title insurance also protects against unpaid real estate taxes, and unresolved liens against the property.

Unlike other types of insurance, such as life and accident, home title insurance protects you against things that might have happened in the past, as opposed to ones that might occur in the future.

Home title insurance protects you and your lender in case a suit is filed against the title of your property.  Home title insurance, which is issued in the amount that you pay for your home, can be bought for a one-time fee that will last as long as you have your property.  You are fully protected if any issues arise that were not covered at the time of the title search.  Any legal costs to fight such claims are fully and wholly guaranteed through your home title insurance.

Claims on home title insurance are rare in comparison to claims on other sorts of insurance.  When automobile and homeowners insurances generally pay back around 70% of their premiums to claims, home title insurance generally pays back only 5%.  Typical claims against home title insurance are back taxes, conflicting wills, easements, and liens relative to mortgage or home equity lines of credit.

If claims are so rare, you might not think that you don’t need a policy.  However, your home is your biggest asset, and just the comfort it brings to know that your house is safe against any such past claims is well worth the investment to most homeowners.  It is a matter of contentment.

Home title insurance is required in many states at the time of closing.  Lender’s insurance, however, only protects the lender up to the amount of the mortgage and it does not cover your equity in the property.  Extended title insurance will cover forgery, unpaid taxes, and liens against the property, just like standard policies, but it will also cover covenant violations, building permit violations, subdivision maps, living trusts, structural damage from mineral extractions, and forgeries and encroachments after the policy date.

You might think that you don’t need home title insurance if you are building a new home, but you should consider it.  If you are building a new home your policy can protect you against problems with the land, like it being the former site of a chemical dump, or sitting on a flood plain.  There could be claims against the land as well, or liens on the property if the builder doesn’t pay suppliers or subcontractors.

So, if you are buying a house, or even by building one, make sure that you have home title insurance.  Your home is your biggest investment and you will face plenty enough challenges of homeownership in the future, there is no need to have past issues or concerns ruin your present contentment.