Maybe you just closed on a property and have just now heard of title insurance. Or perhaps you got a property years ago but still are curious as to if you should get title insurance after closing or not. Believe it or not, this is a common question among homeowners who want to protect their investment. So let’s take a look!
Title insurance is a type of insurance that protects homeowners and lenders from financial losses related to issues with the property's title, in other words, it protects you from any sins of the seller. A title is the legal right to own and use a piece of property, but sometimes, issues may arise, such as unpaid property taxes, liens, or ownership disputes. Title insurance ensures that you are financially protected if any of these problems come up.
There are two main types of title insurance:
It is often purchased during the closing process, but what if you've already closed? Let's find out.
Yes, you can buy title insurance even after the property has closed. While it is more common to purchase title insurance as part of the closing process, there is no legal restriction preventing you from buying it afterward. In fact, many homeowners may decide to get title insurance after realizing that they didn't buy an owner's policy during closing, or simply because they want extra protection.
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It depends on your situation. If you didn't purchase owner's title insurance during closing, buying it afterward could still provide essential coverage. Without title insurance, you could face significant financial costs if there are any disputes or legal claims against your property.
If you are uncertain whether you need title insurance after closing, consider any potential risks related to your property. For example, if you bought a home with multiple previous owners, title issues could be more likely.
The primary reason for buying title insurance after closing is to protect your property investment. Issues with a property's title can come in many forms, such as unpaid taxes, unrecorded liens, or even legal challenges to ownership. These issues can cost homeowners thousands of dollars in legal fees or even result in loss of property ownership.
Having title insurance after closing means you are protected from unforeseen title problems that could arise. It's like a safety net for one of the biggest investments you'll ever make.
Sometimes, new homeowners simply miss out on buying owner's title insurance during closing, either because they weren't informed about it or because it was presented as an optional expense. If this happened to you, it is still possible to purchase title insurance afterward to fill that gap in protection.
It's common for lenders to require a lender's title insurance policy, but this only protects the lender. Without an owner's policy, you have no personal coverage in case of a title issue. Purchasing title insurance after closing can ensure you are fully protected as the homeowner.
Another reason for buying title insurance after closing is the discovery of title issues after the purchase. Perhaps you weren't aware of certain claims or liens when you purchased the property. Title insurance can provide peace of mind and cover the cost of resolving these problems, even if they are found later.
The first step to buying title insurance after closing is to contact a title insurance company or an independent title agent. They can help guide you through the process of purchasing an owner's title policy after the fact. Many companies that offer title insurance during closing are also equipped to provide policies afterward.
Related: Contact Ryan Lipsey, top 1% title insurance agent nationwide and get covered today!
Even if you've already closed on the property, a title search will need to be conducted by the title insurance company. This search will uncover any potential title issues that may affect your ownership rights. The title company will then issue the insurance policy based on the findings.
It's important to note that the cost of the policy may depend on the results of this title search, as well as the property's history. If there are known issues, the cost of the policy could be higher.
After the title search, the next step is to obtain a quote for the title insurance. The cost will vary depending on factors like the value of the property and the title's complexity. Once you accept the quote, you can purchase the policy.
Title insurance is usually a one-time cost, unlike other forms of insurance that have recurring premiums. Once purchased, it will protect you for as long as you own the property, providing long-term peace of mind.
Buying title insurance after closing can be beneficial in multiple ways:
There are some situations where buying title insurance after closing may not be necessary. For example, if you purchased a new home directly from a builder and the title is clear, you may feel that the risk is minimal. However, keep in mind that even new properties can have title issues, such as unpaid contractor liens.
Another situation is if you bought the property from a close family member whom you fully trust, and you're confident that there are no issues. That said, title insurance is still recommended, as it can cover hidden issues that may come up in the future.
Title insurance is an essential tool for protecting your property ownership from unexpected challenges. While most people purchase it during closing, you can still buy title insurance after closing if you missed out initially. The process involves contacting a title insurance company, having a title search done, and purchasing a policy.
Title insurance is particularly important for homeowners who want peace of mind that their investment is secure. Whether you missed out on buying it during the closing process or simply weren't aware of its importance, you can still protect your property by purchasing title insurance now.
Remember, title issues can be unpredictable and costly, and title insurance offers a one-time solution that can save you from significant headaches down the line. It’s always better to be proactive and ensure your investment is protected.
RYAN LIPSEY TEAM