Street Law School: I am buying property. Should I buy title insurance?

If you are getting a home loan, you will always have to purchase a lender’s policy of title insurance. Even when you have a choice, I always recommend that everyone buying a home get an owner’s title insurance policy. For a low, one-time cost, you get an insurance policy that protects what is most likely your most significant investment.

Mortgage lenders make getting a title insurance policy that protects them a requirement for giving you a loan for very important reasons. While it’s uncommon for someone’s homeownership to be attacked, if you are unlucky enough to have it happen, you will be thankful for the protection.

Your seller or builder must have good title, but that may not actually be the case — and they may be long gone by the time a problem surfaces, leaving you with the title problem. Title insurance covers you for various threats that affect your ownership, including a forged deed that happened long ago; or a sale that happens without the seller clearing all the liens, and not being able to later clear all the liens.

Even if everything is on the up and up, mistakes happen, and things get missed, so you don’t want to be the one who ends up paying for the error. Even without title insurance, it may be possible to sue the offending party, but it will be on your dime and at your risk. This is just not a smart chance to take when you can pass it on to a title insurance company.

While it does pay to shop around for title insurance services, the cost of the actual insurance policy premium is almost always the same at all the title and closing companies in Oklahoma. However, other settlement closing costs can vary, and are often discounted in order to get your title insurance business. Most, but not all Oklahoma title insurance agents are attorneys, so you may want to check to see if an attorney owns the title insurance company you select.

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