Title-Owner's Title Insurance

[Ling Lin]

I researched and have a general understanding of what owner's title insurance does. but how often does it happen that after hiring an attorney to conduct title survey, no finds, then i purchased the house, all the sudden there's a person have the Deed to the house? 

[Alex Breshears]

Hi Ling! This can happen frequently that something pops up on a title report, which is why title insurance exists in the first place. If there is an owner's title policy in place and this situation doesn't fall under an exception in the title report, you would need to file a claim with the title company. Title insurance is different from other types of insurance you may be familiar with such as car, or homeowners insurance which has an ongoing monthly payment and covers FUTURE problems. Title insurance for the most part only covers problems that arise related to title before your closing day, not after. So if a mechanic's lien for example pops up after you have closed, the title insurance may not cover that, which is why it is important to read the policy they are offering before you close. Title insurance is also only a one time payment at closing.  I always suggest that owners buying investment property get owner's title because of a problem like this. If there wasn't a clear legal process to exchange title to the property, such as one party doing a quit claim deed to another party, but there is still another owner out there that has an interest in the property, a situation like this can arise.  In addition, there are cases where the county or the city has a backlog of documents to actually record, so this could be the case here as well. If a document such as a lien instrument or a deed were in the process of being recorded when the attorney did the initial search, then it would not show up on a title report at that time.