I know the title insurance is required, but not the owners title insurance...

discuss...

 

How risk averse are you? How much equity do you have in the property (how much would you lose)?

The required title insurance protects the lender, not you. If there is a problem with the title, the lender is protected -- you are not. Problems could include complications from the divorce or death of a prior owner, claims by a holder of some other type of lien against the property (tax, mechanics, etc.).

For me, the owner's protection is a small price to pay. However, when we bought rural property from an owner that had held it for 50 years and was unimproved, I decided not to get the owner's coverage - since there was no real risk.

 

Title insurance protects the lender. Owner's title insurance protects YOU if a title defect pops up--otherwise you are on the hook for your own legal defense.

Don't assume that just because a title search comes up clear that everything will be ok. Even the best title searchers can miss something. I've seen it happen. In fact, we called an attorney a few weeks ago to tell him that a deed in a chain of title on a closing he did was forged. Someone in the family had forged our (dead) client's name on the deed and I found it when I was working on his estate.

Edit: Didn't see what the above poster had said, but he/she has it right on the money. Sorry!