Title Insurance on Land Purchase

[Elissa Bateman]

I'm purchasing a lot from a builder (who is purchasing from a developer) for an eventual STR property in Broken Bow, OK. Should I buy title insurance when I buy the lot?

The title company mentioned certain advantages to purchasing title insurance on the land, and we wouldn't need to purchase again when we refinance the construction loan.  But the builder said we would have to purchase title insurance a second time, and she personally wouldn't do it.  It would also slow the transaction a bit, which is no problem for me.

I am quite risk-averse, so I tend to want to purchase title insurance, but I don't want to waste money if I have to repeat it. 

Can anyone offer guidance or other considerations?

[Peter Walther]

I think the confusion is over the amount of insurance you need to buy. For example, if you're buying the lot for $100k and you're paying the builder $400k to build the house you'll have $500k into it when completed so how much title insurance should you buy?  The correct answer is whatever the market value is after the house is completed.  If it's expected to be $650k that's how much you should ask for when closing on the lot purchase.  The title agent will ask for some sort of documentation substantiating the expected value, say an as built appraisal, and your policy should include an exception called a pending improvements clause that advises the amount of insurance will increase with value of the property as the improvements are made but then you'll only be buying on owner's title policy and you'll be fully protected.