Great Reason to Have Owner's Title Insurance. Entire Subdivision Affected.

I often get asked whether it is worth it to purchase owner's title insurance when buying a home. I always say YES. I like to tell the story of what happened to a group of homeowners in a little subdivision, Anne Place,in Cobb County Georgia.

A man in Cobb County had inherited over 50 acres of land from his grandmother. It just so happens that he married a lady who had the same name as his grandmother. Unfortunately they divorced and he had moved out of state.

His ex-wife, pretending to be the grandmother who had the same name, went ahead and sold the land to a developer. They did a title search and assumed that she was the owner since her name was the same as the name still on the deed.

The developer went ahead and built 59 homes on the land. Everyone assumed they had clear title to their property.

Then one day the ex-husband, the real owner, came back to town to find that there were now 59 homes on his land.

As you can imagine, there was a huge legal battle. The people with owner's title insurance were made whole while the ones without title insurance had a huge problem.

Larry Feldman, a real estate attorney in Atlanta, told me that last year there were $40,000,000 in title insurance claims in Georgia alone. Owner's title usually costs around one dollar per thousand dollars of coverage. So a policy for a $300,000 home would cost $300. This is a one time fee that I think is really worth it.