2 ways title insurance protects New York home buyers

On Behalf of | Jul 29, 2022 | Title Issues

For the average adult in New York, there will be no bigger purchase in their life than the home where they live. Residential real estate is often worth hundreds of thousands of dollars, and those who finance real estate transactions may spend up to a third of their income every month to pay their mortgages.

Becoming a homeowner is an expensive process. Most people need to save for years to have a downpayment and the money necessary to cover closing costs. The price that you offered for the property isn’t the only cost you have to cover when you buy a home.

Buyers in New York pay thousands of dollars in closing costs, including the cost for a title insurance premium. Although most people will never need title insurance, it provides two crucial forms of protection if there is ever a dispute about who is the rightful owner of the property where you live and invest your money. What does title insurance offer policyholders?

Coverage for legal representation

If there is a title claim against your home, you will very likely end up going to court to resolve it. A judge will have to review your purchase records and whatever documents give the other party grounds to claim an interest in the property.

It can cost thousands of dollars and take multiple hearings in court to resolve residential title disputes. Your title insurance policy will cover those costs so that you don’t have to come up with a retainer for a lawyer without advanced warning.

Reimbursement for property losses

Ideally, the lawyer who represents you in a title claim scenario would be able to defeat the claim and preserve your ownership interests. However, sometimes the current owner loses their right to the property and also whatever they invested to purchase the property and maintain it. In a scenario where the courts declare you are not the rightful owner, your title insurance policy can reimburse you for the money you have invested in the property thus far.

Understanding how title insurance protects you as a residential real estate owner can help you make use of the coverage you bought when you purchased your home.