Title insurance is a risk business, so generally you can’t get insurance unless the carrier feels there is very little risk.
Having said that, I would always advise people to purchase title insurance if there is a large downside.
For example, if you are giving the seller $1 to take a deed to his property subject to an existing loan and you simply rent it out, what’s the risk? If there’s a title problem or the seller’s loan gets called due, you have nothing at risk financially. If you sell the same property on a lease/option and now the buyer wants to exercise and there’s a title flaw, no you’ve got a problem.
Is title Insurance needed for owner contract? - Posted by wayne C.
Posted by wayne C. on October 15, 2003 at 03:34:24:
If I have done a title search and the property has a clear title on an owner contract, Why do I need title insurance?
Is title insurance a scam? Has anyone ever collected from a title insurance policy?
Is title Insurance needed - Posted by John Merchant
Posted by John Merchant on October 15, 2003 at 12:57:21:
Definitely NOT any scam, and T Insurance companies pay off constantly.
Equally important, they will supply a normally competent RE knowledgeable lawyer, at their cost, to defend whatever title rights they state, in writing, that you’ll be getting when, as you purchase.
So, as Bill B says, if you have any substantial risk of loss if you don’t get title you’re thinking you will, by all means do buy the T.I…otherwise, if you really have to great risk of loss, you could just go on your own title research.