Homebuyers should know the difference between homeowner's insurance and title insurance
While many homebuyers do their research before diving into the homebuying process, it can still be a very confusing experience due to the sheer amount of information involved. The homebuying process, coupled with today’s competitive market, can pressure homebuyers to speed through parts of the journey without a deep understanding of what they need, or in some cases, don’t need.
Title industry experts have found that only 1 in 5 homebuyers understand the documents presented to them during the closing process. Many homebuyers don’t fully understand what title insurance is and why it’s so critical to protecting their property rights. Part of the part of the problem is that title insurance is easy to confuse with homeowners’ insurance.
In the simplest terms, title insurance protects your property rights. It is a unique form of insurance that, per the American Land Title Association emphasizes risk prevention than risk assumption. While a homeowners’ insurance policy protects the physical and tangible assets of a home, a title insurance policy protects new homeowners from any past issues affecting their right to own and use the property.
Homeowners' insurance protects a person from unforeseen issues related to their property. Just like other forms of insurance, homeowner’s insurance can be customized and enhanced, so it’s crucial to fully understand what type of policy will best suit your needs. It’s really a packaged policy that encompasses multiple areas related to your home.
Title insurance is a one-time premium for coverage that lasts as long as you own your home. It doesn't go up after you purchase your home. Homeowners' insurance requires the payment of an annual premium which may increase from year to year.
If you would like to know about title insurance, let us know!
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