Ask Chuck: Do I need anti-theft insurance?
My spouse thinks we need to protect our house with a title lock. I don’t agree but I agreed to check. We have title insurance, so do we really need a title lock?
Title lock or title insurance?
Dear title or title insurance,
This is a complicated but important question that affects every homeowner. I will sort out the difference between a title lock and title insurance and then give my opinion.
There are two types of title insurance: lender’s and owner’s.
- Lender’s title insurance is required by mortgage lenders, but cash buyers usually purchase it as well. This protects your title and the lender against false liens, judgments, errors, omissions, bogus heirs, or a criminal attempting to file a false quitclaim on your property. It only protects you and all heirs against claims that challenge valid ownership before the date the home was purchased and insures title only for the term of the loan.
- According to mortgage and credit expert Caroline WarrenHomeowner’s title insurance protects the homeowner against adverse claims against title for as long as one owns the property, even after paying off the mortgage. It is optional and only needs to be purchased once. A article on Forbes Advisor states that a title deed policy is optional, but can protect you from losing your equity and the right to live in the home if a claim arises after purchase. Title issues can even arise when buying a new home from previous landowners or from unpaid contractors. A policy can protect against:
- Property investigation errors.
- Border disputes.
- Errors on the title deed.
- Building code violations by a previous owner.
- Conflicting wills.
- Claims of a former spouse who did not authorize the sale.
- Falsified Power of Attorney Claims.
- Privileges of contractors, tax entities or former lenders.
- Unpaid child support from a former landlord.
- Documents incorrectly saved.
Both forms of title insurance are worth the one-time cost which varies depending on the price of the home. Bankrate.com offers several ways to save when purchasing title insurance.
There are TV commercials and people claiming that Title Lock will protect against title fraud. This happens when someone forges your name on a deed and files it with the county courthouse. Using the house as collateral, he is then able to borrow money against it. Although rare, it is a growing crime. Title lock is not Insurance; it is simply a monitoring service that periodically checks to see if your title has been transferred out of your name. The notification comes after it happened and does not resolve the issue. See this brief explanation on Fox5Atlanta.com.
Title insurance is what protects you. The title company must resolve the problem and cover all costs incurred. Older people, or those who do not understand their rights, are frequently targeted. The crime is most successfully committed against those who fully own their home and have no debt on it. If a scammer is illegally claiming ownership of a house, he will need to prove the validity of the signing of the deed. The penalty for the crime of forgery in the first degree is imprisonment.
In most counties, you can access county property records online and do the checking yourself. Paying for Title Lock is therefore an unnecessary expense. Companies that offer title lock services profit from the fears they create.
Some other ways to protect yourself against title fraud:
- Check your credit report to see if any actions have occurred that could determine identity theft.
- Make sure you receive all your bills. Otherwise, you could be a victim.
- Periodically check the information at your county’s deeds office to verify that no changes have occurred to your home.
If you think you’ve been the victim of identity theft, seek help immediately. Experian offers tips.
My wife and I have purchased title insurance for every home we’ve owned and suggest you do the same, but I can’t find any reason to purchase Title Lock’s services.
The Crown Stewardship Podcast is a valuable resource to guide you through the many facets of God’s financial principles. You can subscribe to new episode alerts. Hope you find it beneficial!
Chuck Bentley is CEO of Crown Ministries of Finance, a worldwide Christian ministry, founded by the late Larry Burkett. He is the host of a daily radio show, my money lifefeatured on over 1,000 Christian music and talk stations in the United States, and author of his most recent book, Economic proof for God?. Make sure you follow Crown on Facebook.