While they may sound similar, title insurance and homeowners insurance are entirely different products that provide protection in various ways.
Most folks are more familiar with homeowners insurance, which covers a home in the case of future damage. These policies are typically paid monthly, quarterly, or annually. The exact coverages can vary, and may include things like:
- Damages to the interior or exterior of a home
- Theft of personal property within the home
- Living expenses when a home is uninhabitable
- Liability coverage if someone should hurt themselves on the property
While homeowners insurance protects a home against future damage, title insurance covers past defects or errors in the home’s chain of title to ensure that a buyer has full legal rights to their property. Title insurance is paid only once, as a one-time premium on settlement day, and it typically provides protection against things such as:
- Errors mistakes in recording or public records
- Fraud
- Liens for unpaid taxes, including estate or inheritance taxes
- Past delinquent taxes
- Forgeries
- Undisclosed or missing heirs
- Failure of spouses to join in conveyances
- Undiscovered wills
- Unknown easements
One thing that both have in common is that both homeowners insurance and title insurance are almost always required by the mortgage company, as the lender has a vested interest in protecting the property.
If you’re curious to learn more or have any questions, please don’t hesitate to email us at titleservices@securityabstract.com or by calling (610) 584-6890. A licensed title agent will be happy to provide assistance at any time!