title insurance

What are the pro's and con's of purchasing title insurance?  It is not required to purchase ahomein the state of Tennessee.

WQ, is this a purchase or refinance? If it is a refinance then a lender's policy will be required by the bank and you don't have the option of waiving it.

On a purchase, you have the option to buy an owner's policy in conjunction with the lender's policy. The only con is the expense. Most people who buy owner's policies never have to file claims. However, if you ever have to file a claim, you will be glad you have an owner's policy. The policy itself insures you against financial loss if there are any defects in the title of your home. Defects can include things like old unreleased liens or improper transfers of the land in the past where a person still has a legal ownership interest in your land. Consult a title attorney for more specifics.

I had a client who owned a house jointly with her sister and her sister passed away. The deed did not have rights of survivorship (meaning the deceased interest would automatically transfer to the surviving owner). However, the title policy specifically stated that the deed would be recorded as joint tenants with rights of survivorship. My client was forced to open an estate and ended up being responsible for many costs and taxes to get the property deeded in her name only. She filed a claim against the title insurer for damages and she was fully re-imbursed. Long story short, her $800 title policy covered over $10k in damages.