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To Buy or Not to Buy Owner’s Title Insurance?: That is the Question!

 

I’m often asked whether a buyer of Massachusetts real estate should spend the money to purchase owner’s title insurance on their new home. This is a type of insurance policy protecting a homeowner when problems arise regarding their rights of ownership in their real estate. My response is the answer often lies in how the property owner generally manages risk, but considering the purchase of real estate is often the greatest investment they’ve made to date, it is a wise purchase.

In the past few years, I’ve been able to assist homeowners to access their owner’s title insurance coverage to remedy problems with undischarged, prior owner mortgages still on their title. The coverage allowed sales of homes to proceed without delay while the problems were later fixed. Another client was unable to tear down a small home existing on their lot to build a bigger house because an easement ran through the width of their property which prevented rebuilding a larger home. That owner was paid over $45,000 for the loss in value he suffered. Finally, another client tried to build a new home on his vacant lot, only to be told by his bank’s lawyer that a probate had once been done in the wrong procedure and the bank wouldn’t continue with the loan until the correct procedure was corrected. I was able to do the correct probate and his owner’s title coverage payed for the legal fees and costs.

Given the substantial value of the real estate investment and the low, one time, premium I believe Owner’s Title Insurance Coverage is a good value.