Understanding the Difference Between Title Insurance and Homeowners Insurance

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!

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