Title Insurance is not mandatory, but is pretty necessary
New York State law does not require a purchaser of a home to acquire title insurance; however, title insurance is often purchased by the home buyer because it eliminates risks associated with title problems. New York State’s title insurance rates are subject to prior approval of the Superintendent of Insurance.
Typically, if there is a mortgage, the lender will require the purchaser to buy a policy of title insurance covering the lender’s interest. Since the amount of the mortgage is generally less than the price of the home, the purchaser will be at risk for defects in the title to the extent that they exceed the mortgage amount. Because the loss can be greater than the mortgage itself, home buyers frequently purchase owner’s policies of title insurance in addition to purchasing lender’s policies. (dfs.ny.gov). So while purchasing title insurance is not mandatory, protecting a person’s greatest asset should be important enough to invest in.
An educator in the real estate field (Inman.com) posted a great article outlining three scenarios in which it is crucial for an owner to poses title insurance. a writer for Inman.com explains on September 10, 2015 how title insurance is a one time fee that protects the homeowner.
While some consumer savings websites have advise homeowners that title insurance is a line item that they can
MoneyCrashers.com explains that protecting the ownership of the home is imperative.
Title insurance policies also cover the cost of resolving (also known as curing) most title problems (also known as defects) uncovered during the title search. Common defects include, but are not limited to, the following:
- Tax liens (for unpaid taxes)
- Construction liens, also known as mechanics’ liens (for unpaid construction or renovation bills)
- Creditor liens (for instance, an unpaid balance on a preexisting mortgage)
- Court judgments (for instance, a post-divorce judgment awarding part of the property to a former spouse)
If you have any questions about title search or title insurance, please contact our office at 518-631-6300 for more information. If you are looking to order title insurance now, you can order by filling out our REFINANCE FORM or NEW PURCHASE FORM and a representative will reach out to you as soon as possible.