Title Insurance, What is it?

For most homeowners, their home represents a massive portion of their net worth; it is also the place that holds what most people care most about – their family. It stands to reason that people will want as much protection for their defining investments, and the people they love, as possible. Thus, homeowner’s get home insurance, security systems, etc., however, title insurance is possibly more important than those things.
When you take ownership of a home, the legal jargon is “taking title.” Whoever holds title to a piece of property is that property’s legal owner. Thus, title insurance protects against the possibility that someone has a competing claim to your home. While we don’t need to get into a law school hypothetical, it’s surprisingly common for sellers to be misinformed about their ownership interest in a property, and therefore what ownership interest they can transfer. Title insurance is very important to lenders and should be important to you.
Title insurance protects the owner and the lender from financial loss that comes from competing claims on your property; these claims include probate issues, liens, fraudulent claims, or something as simple as a clerical error. Any legal issue that arises as to your ownership, title insurance will protect you.
If a lender doesn’t require you to obtain title insurance, you might want to consider a different lender; not requiring insurance to protect your ownership interest is a reckless move. Thus, most lenders will require you to purchase some form of title insurance; there are two types of title insurance though, lender’s title insurance and owner title insurance. The distinction is whom the insurance protects. Since lenders are only interested in protecting themselves, they’ll only require you purchase lender’s title insurance; given all the benefits title insurance provides, you want to get owner’s title insurance as well. Luckily, this is standard in home sales in California and standard practice is for Seller’s to pay for the policy. Unlike most insurance, where you pay monthly, title insurance is paid for with a one-time premium during escrow.
At the Chernov Team we understand that knowledge is power, and knowledge of how to protect an investment that represents the bulk of your net worth is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.