After house's 4 decades with one owner, does buyer need title insurance?


DEAR HARRY: We just placed a deposit on a lovely home in the northern suburbs owned by people who have lived there for 43 years. Our son raises some questions about title insurance: Since the house was owned for at least 40 years with no questions regarding a clean title, why do we need title insurance? After so many years, we can be certain that the title is OK, can't we? We easily could handle modest losses ourselves or go after the present owner for not conveying a "marketable" title. Settlement is scheduled for late June. Give us the benefit of your experience with title insurance.

WHAT HARRY SAYS: Get it! You won't be able to get a mortgage without it. Title-insurance companies do a thorough search for any possible title problems with the property before they will insure it. They hope to avoid ever having to pay claims. The insurance will indemnify you, the new owner, against losses caused by title defects and unknown liens, with the possible exception of items specifically excluded as a result of past questionable settlements. If a problem is found, say, five years from now, the company will settle the claim with little hassle to you and no loss of money. Save money elsewhere.

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