Understanding Owner's Title Insurance

As a lawyer working in real estate, one of the most common questions I receive is about owner's title insurance. Specifically: "Do I need to purchase owner's title insurance?"

Legally speaking, the answer is no. In Virginia, you are not legally required to have owner's title insurance. You'll just need to sign a waiver if you choose not to get it.

Practically speaking, however, most attorneys would agree that it is a very wise investment.

How Does Owner's Title Insurance Work?

Unlike other types of insurance, which require a monthly payment, owner's title insurance is a one-time premium paid at the time of closing. There are no future costs after that initial payment.

The insurance covers any title problems that could call your ownership of the property into question or result in financial liability. This includes previously unknown liens, prior claims of ownership or other problems with the title.

After buying the home, for example, a contractor who previously worked on the house could claim that they were not paid (or paid adequately) for their work. Or, you could discover too late that the previous owner failed to pay taxes on the property. In both cases, owner's title insurance would protect you from liability or compensate you for any financial loss incurred.

Can I Choose My Own Insurer?

Yes, many people shop around for their owner's policy. My firm works with a reputable title insurer called Olde Salem Title Agency, which is backed by Fidelity Investments. As your attorney, I would likely refer you to this company, but there would be no referral fee and you would not be obligated to choose that particular insurer.

Get All Your Real Estate Questions Answered — Call My Firm Today

I am James T. Jordan, Attorney At Law. I have nearly 15 years of experience in real estate law, and I am happy to offer free initial consultations to potential clients in the Roanoke Valley. To schedule an appointment, you can fill out this online contact form, or call my office in Salem at 540-384-1923.