If you're considering a real estate purchase, you may be wondering if paying for title insurance is worth it. Understanding how it works and why it's crucial in home-buying situations may alleviate your reservations about its value. Here's what you need to know.

What Is Title Insurance?

Title insurance protects you and your lender from undisclosed claims on your home, title defects, and financial loss. When a title company conducts research on a property's ownership history and declares a title clear, buyers and lenders have assurance that the title is free of defects and there are no outstanding claims against it.

However, you may not be safe from title issues that haven’t yet surfaced. For example, there may be an error in the ownership history, an unknown heir may exist, the title may be fraudulent, or there may be a pending lawsuit. If such problems come to light, your title insurance policy can protect you from legal costs and financial losses.

Why Do You Need Title Insurance?

Although title insurance is optional, it's better to take preventive action today than suffer from ownership complications in the future. A title claim remains a possibility even if you’ve owned a property for several years. If your ownership is challenged, your policy will cover the expenses arising from the legal dispute. If you have no title insurance, however, you’ll have to shoulder the court costs, back-tax claims, and attorney's fees. 

How Do You Know If Title Insurance Is Right for You?

Title insurance is ideal for those looking to purchase an older home with a lengthy ownership history since past events can suddenly resurface. Even if you’re buying or building a new house, it provides protection from undiscovered ownership threats. 

Chattanooga Title will expertly guide your purchase of title insurance, helping at every stage in closing on a home, conducting title searches, and buying real estate in and around Hamilton County, TN. Call them today at (423) 756-3057 to schedule an appointment to learn more about this full-service title company.