Private title insurance?
July 12, 2016 10:57 AM   Subscribe

We are about to close on a house and have been offered private (owner's) title insurance in addition to the title insurance the mortgage lender requires. Cost is a one-time $2.5k payment.

We have enough resources to hire a lawyer if there's a title dispute. We do not have enough resources to buy a brand-new house if we lose a title dispute.

Worth the expense?

Additional information: House is being sold by an older couple. Wife has dementia so husband has power-of-attorney for her when it comes to the sale documents.
posted by whitewall to Work & Money (5 answers total)
What percentage of the cost of the house is $2,500?
posted by griphus at 11:12 AM on July 12, 2016

Response by poster: About 0.4 percent.
posted by whitewall at 11:16 AM on July 12, 2016

Why do you need two policies?
posted by fixedgear at 12:20 PM on July 12, 2016

My lawyer dad told me, never buy private title insurance. If you're in a state that uses title insurance instead of abstracts, get the minimum required by your lender and that's it. He was adamant.
posted by fedward at 1:45 PM on July 12, 2016 [2 favorites]

I disagree with lawyer dad, adamant notwithstanding. The lender's policy protects the lender, and the lender only. As the loan is repaid, the insurance coverage shrinks. The owner's policy protects the owner so long as he owns the home.

As I see it, $2,500 for that protection for a $600,000 investment is well worth it.
posted by megatherium at 5:34 PM on July 12, 2016

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