Even though a title search is completed before you buy, an issue may not come to light until after you own the property.
Title insurance helps reduce risk to a buyer who wasn’t aware of an existing problem. In all these cases, a third party may try to lay claim to your property.
Someone else may have rights to a part of your property, such as a utility company, but that's not discovered during the buying process. If the property line isn't clear and a neighbor builds a fence or outbuilding on your land, this impacts your property rights as well as protects you against an existing improvement that encroaches on their property. They could be from a homeowners association where a fine wasn't paid, a contractor who wasn’t paid for work completed or the government if property taxes weren’t paid. These are statements of debt filed against the property. A past owner could have made it look like a mortgage was paid when it actually wasn't, leading the past lender to foreclose. Such as a forged signature or altered details about the property If a mistake is made on the deed, such as it is not recorded in your legal name, ownership of the property could be unclear. Owners Title insurance protects you against any problems related to your deed or property ownership that might come up after you buy a house. Past owners may not have done paperwork correctly, or they may have engaged in fraudulent activity related to the property. When you buy a house, you’re taking on some risks. One of the most important, but least understood, is owner's title insurance. When you start your homebuying journey, you may find you'll have to purchase several things you weren't thinking about when you were saving up for your down payment.
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