Can I Buy Title Insurance After Closing?

title insurance
Published On: July 5, 2022

Did You Opt Out of Title Insurance at Settlement?

The deal on your home has gone through – all paperwork is signed, the keys are in your hands, and you are settling into your new home! After the adrenaline wears off, though, the “what ifs” may start to creep in if you didn’t purchase owners’ title insurance.

“What if” a long-lost heir makes a claim on your property? “What if” there was an unknown mechanic’s lien? “What if” my neighbor disputes the property line? There are many “what ifs” after you close on a home, which is why title insurance is recommended for buyers.

“What if” you passed on title insurance at settlement? Can you buy title insurance after closing? Let’s dive into whether you can purchase insurance (spoiler alert – you can!), what issues can arise between settlement and when you procure title insurance, and how the cost of title insurance is determined.

Can I Purchase Title Insurance After Closing?

The short answer is yes, you can still purchase title insurance after closing and in fact, any time you’d like. There are no time limits on when you can purchase title insurance. But waiting to purchase title insurance can be risky.

Although title insurance protects you from title defects both in the past and anything discovered in the future, if something arises between settlement and when you purchase insurance, you can be held liable for the issue.

What potential situations could arise between closing and when you purchase title insurance? Here are a few scenarios where purchasing title insurance before closing can be especially beneficial:

Public Records Errors
Even the most detailed oriented person can make a mistake. Some public record errors can create a nightmare for homeowners. For example, during a title search your title company initially found no errors. Months later, you discover there was a typo with the previous owner’s name on a document. Without title insurance, you would likely be responsible to fix the error.

Fixing a typo may not sound like a huge task to take on, however other public record errors can cost thousands of dollars to rectify and can even put your ownership at risk. Let’s say your new neighbor disputes the property line between her home and your home. Without title insurance, you may face a legal battle, the expense of a property survey, and you may endure a financial loss.

Estate Sales
If you purchased your home from an estate, there is a chance an unknown heir may try to claim they have the legal right to the property. Perhaps it is a child who was estranged from a parent or even a former spouse that claims the property was promised to them in a will. Either way, without title insurance, you could face an expensive lawsuit to prove you are the rightful owner.

Unrecorded Liens
During a title search, most liens are uncovered and remedied to deem the title “clean” for sale. Some liens may not be immediately discoverable, though, especially mechanic’s liens. Mechanic’s liens are placed on a property by a contractor, subcontractor, or supplier for work done on a home.

Let’s say the previous owner had new flooring installed prior to the sale of the home. The previous owner neglected to pay the final invoice. The contractor can place a mechanic’s lien on the home until the debt is paid in full. because liens are attached to properties – and not the original debtor – you would be responsible for the debt for the new flooring.

In all of these cases as well as other title disputes, owner’s title insurance would have provided protection. Without it, the process of resolving a claim or issue can be stressful, time-consuming, and expensive. This is why your title insurance company recommends purchasing title insurance during the closing process when you are buying a home.

What is the Cost of Title Insurance?

There are so many fees and expenses when purchasing a new home and the additional cost of title insurance may feel unnecessary. Unlike other forms of insurance, though, the fee is one-time and covers you for the duration of your home ownership.

The cost of title insurance is based on the purchase price of the house with rates set by the Title Insurance Rating Bureau of Pennsylvania. Rates vary, but to get an idea of what your investment would look like in Pennsylvania, a title insurance policy for a home priced at $200,000 would be $1,600, and for a home priced at $250,000, $1,885.

Considering the cost of legal fees, title insurance is a wise investment to give you peace of mind your investment is protected from title issues. Remember – lender’s title insurance, which was likely required by your mortgage company before settlement, doesn’t protect you at all – it only protects the lender. Owner’s title insurance protects you as the home buyer.

Your Local Title Company in York, Pa.

If you’ve recently purchased a home but opted out of owner’s title insurance, the team at Watermark Land Transfer can help. As a full-service title company, our team is well versed in title issues and title defects and can help you navigate purchasing title insurance after closing. Whether it’s been a week since settlement – or even years – reach out to us today to get a conversation started.

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The Benefits Of Choosing Watermark

Watermark Land Transfer is a real estate title company in York, PA offering title services, title insurance, closing and settlement services, and notary services. Our goal is simple - to provide our clients and our community with the resources they need for a hassle-free closing. We are more than a title company and work hard to show our clients that we are truly consumer-focused.

Our team of title agents makes it easy for homeowners to buy or sell a home in Central Pennsylvania and Northern Maryland. We offer both on-site and virtual title and settlement services and treat our clients like family. If you are in the process of selling or buying a home, reach out to us today to see how working with Watermark Land Transfer can help.

1st Watermark Benefits

We Are Vested in You

When you work with Watermark Land Transfer for your real estate transaction, we are truly vested in your success. We treat each contract, document, and closing as if it were our own.

2nd Watermark Benefits

We Keep You In the Loop

During the closing process, we will keep you informed every step of the way so there are no surprises on settlement day.

3rd Watermark Benefits

We Live Here, Too

Watermark Land Transfer is an independent, locally owned title company. We have the flexibility to get things done for you without the constraints of a national title company.