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When paying cash for a new home, there are no regulatory laws that providing that you MUST purchase Owner's Title Insurance. However, an Owner's Policy protects you against liens and title defects that might have occurred during previous ownerships. A comprehensive title examination should always be performed to support the title policy.

What if the builder of your new home never paid off a mechanic's lien against the property and it was never paid? Liens affect the property, not the previous owner. If the builder refused to pay the lien amount after the closing took place, you would have to either sue the builder or pay the lien and then sue the builder. If you had an Owner's Policy, the title insurance company would be required to defend the claim in court - all for the one-time fee you paid for the policy.

It is a low cost, one-time fee insurance that is in effect for the lifetime of your ownership, whether you own the property for 1 year or 100.

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โˆ™ 2014-10-15 15:17:25
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Q: Do you need title insurance if you are paying cash for a brand new home?
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Yes. Title insurance protects your title to the property regardless of the cost or whether you paid cash. Banks insist on a title examination for mortgaged property in order to protect their investment. A person who pays cash should also obtain a policy in order to protect their investment. Title defects are usually disclosed when you sell the property and the buyer's attorney arranges to have the title examined in order to protect their client's investment and their own liability. If the title exam discloses any defects in your title you will be responsible for the costs of having any problems corrected that can be costly. Also noteworthy is that people who purchase distressed properties on the cheap often do not have a thorough title examination performed in order to save money. Those properties are more prone to defects in the chain of title.


Do I need title insurance if I buy a home with cash and no mortgage?

Yes. You still need to protect your investment.


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How do you get a copy of title insurance if title company is out of business?

If your closing was done by a Title Agen, which is most likely the case, they had to have an underwriter. You can go online to your State's Insurance regulation website, enter the company you dealt with and that should show who their underwriter was. If the underwriter is not listed, call the state's Insurance Regulatory office and ask. The Underwiriter should be able to provide you with a copy of you Title Insurance Policy. Remember that if you paid cash for a property you were not required to purchase an Owner's Policy.


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