Can You Buy Title Insurance After Closing?

Title insurance offers a financial safeguard against potential issues or defects in a property’s ownership history. It protects both property owners and lenders from losses that might arise due to unknown problems with the title. While other types of insurance cover future events, title insurance focuses on protecting against past events that could affect the legal right to a property. This coverage helps ensure that the legal right to use and own a property is clear and free from undisclosed claims. It is generally acquired during the closing process of a real estate transaction.

Possibility of Purchasing Title Insurance After Closing

Purchasing title insurance after a property closing is generally possible, though it is less common than obtaining it during the initial transaction. While many buyers acquire an owner’s policy at closing, some may choose to forgo it or may not have been fully aware of its significance at that time. A title company can still issue an owner’s policy days, weeks, or even years after the property has been acquired.

When obtained post-closing, the policy is an owner’s policy, protecting the property owner directly. A new title search would be necessary to identify any issues that might have arisen since the original closing or were missed previously. The absence of a lender requiring the policy, as would be the case in a typical purchase, means the homeowner bears the full responsibility for initiating and covering the costs of this post-closing policy.

Risks of Not Having Title Insurance

Forgoing title insurance can expose a property owner to various unforeseen financial and legal burdens, even long after the purchase. One common risk involves undisclosed heirs who might later claim an ownership interest in the property. Forged documents or fraudulent transactions from the property’s past can also jeopardize ownership rights, leading to potential loss of the property. Errors in public records, such as misspelled names, incorrect property descriptions, or improper indexing, can create legal complications that affect the validity of the title.

Outstanding liens, including unpaid taxes, contractor fees, or court judgments against a previous owner, can attach to the property itself, making the new owner responsible for these debts. Boundary disputes with neighbors, arising from inaccurate surveys or unclear property lines, can lead to costly legal battles and impact property use. Without title insurance, an owner would be solely responsible for the legal costs and potential financial losses associated with resolving these issues, which can result in the loss of the property.

The Process for Obtaining Post-Closing Title Insurance

Acquiring title insurance after closing involves a structured process, typically initiated by the homeowner. The first step involves contacting a reputable title insurance company or an independent title agent. These professionals will guide the homeowner through the necessary procedures to establish coverage. A new title search will be conducted to examine public records for any liens, encumbrances, or defects that might affect the property’s title.

Following the title search, the title company’s underwriters will review the findings to assess the property’s title history and determine the policy’s terms. A new owner’s policy is then issued, providing protection against covered risks. The homeowner is responsible for bearing the entire cost of this policy, unlike at closing where costs might be split or paid by the seller. Title insurance premiums are based on the property’s value.