Is Title Insurance Worth It? A Real World Example

We get a lot of questions about owner’s title insurance, so we wanted share a real example of how valuable it can be. Almost every purchase transaction we close includes an owner’s title insurance policy. While optional, it’s rare for a home buyer to decline it. And in a recent transaction, the owner’s title insurance saved the closing.

Before every closing, whether a purchase or a refinance, our office performs a title search. We review tax assessor and tax commissioner records, as well as public deed records, to determine ownership and the existence of any liens or encumbrances on title. Even an exhaustive title search has its limits. A title search can’t safeguard you from “hidden” defects such as forged signatures, undiscovered liens, or missing heirs. And, well, sometimes people make mistakes. That’s when an owner’s title insurance policy becomes important.

What If a Prior Lien is Found?

In this particular transaction, our title search found two Georgia Department of Revenue liens against a prior owner totaling over $6,000.00. These should have been paid off when our seller, the current owner, purchased the property, but for whatever reason, they weren’t. But, fortunately, the seller had purchased an owner’s title insurance policy, and we were able to obtain a copy from the law firm that handled their prior closing. The title policy had been issued by a company we also represent as an agent. Our title insurance underwriter weighed the risk of loss and allowed us to close the transaction and issue a new policy, with no exception for the outstanding liens. 

Without a title policy, the seller would have been responsible for paying those liens at closing. 

The new owner now has their own title insurance policy and is likewise protected. If the Georgia Department of Revenue were ever to attempt collection, the title company would either defend the new buyer or pay the claim. Owner’s title insurance is a one-time premium and provides lifetime coverage. 

How much is Owner’s Title Insurance?

You can visit our online calculator to get an estimate, no sign-up needed.

If you have any questions about how title insurance works, please contact us, and we’ll be happy to help