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Is Title Insurance Transferable After Purchasing?

Monday, March 28, 2022

With over 5 million homes sold in the U.S. in 2020, it's clear that the housing market is still going strong. But purchasing a house still comes with plenty of uncertainty.

There are always a few factors that escape review, such as the status of the home's title. What if there are encroachment issues or unknown easements?

That's where title insurance comes in. This article will explore whether you can transfer title insurance for those currently looking to buy title insurance. 

What Is Title Insurance?

Title insurance is a type of indemnity insurance meant to protect homebuyers and lenders from any defects to a title to their property. There are two main types of title insurance.

The first type is lender's title insurance. A borrower purchases this to protect a lender. The other type is owner's title insurance purchased by the seller to protect a homeowner's equity.

Why do people get title insurance? Unfortunately, home titles receive claims the time. These claims are for back taxes, conflicting wills, and liens.

Title insurance is a one-time purchase made by borrowers or lenders to protect them from costly administrative fees and other costs. It's one of the few insurance options that protect against false documents.

Can You Transfer Title Insurance?

The simple answer is: no. When you purchase title insurance, it belongs to you and only you in most cases. It's a lifetime guarantee to that legal title, so it can't be easily transferred.

You have to finalize it with title insurance companies to buy title insurance. There are, however, a few instances where one's title can be changed. 

What if I Want to Add Someone to Existing Policy?

Fortunately, you can add a spouse or dependent to an existing title insurance policy. The property stays covered, and the policy itself won't change.

This means you and your heirs remain protected under your policy, and it won't change once you take someone off as a dependent. Also, if the owner dies, title insurance is transferred to that spouse.

Depending upon what year your policy was issued, even a simple transfer may void your policy. Please have your policy available for review.

Can Title Insurance Be Inherited?

Sometimes title to a home transfers from one family member to another. This isn't necessarily the case with title insurance, however. 

To transfer insurance from one person to another, inheritance is usually the only avenue. If a property owner dies, transferring it over to another individual is possible. 

If the legal title goes to a new owner, that title policy becomes moot and can't transfer to someone else. However, title insurance will continue as long as it's passed on to a legal beneficiary.

Finding Ways to Buy Title Insurance for Future

If you're looking to buy title insurance, it might seem intimidating. This is especially true if you realize that transferring to another person is more complicated than you might've expected. 

Use this guide to help you understand the specific instances when title insurance can be carried over from one individual to another. 

Are you looking for a reliable title insurance company in the Pennsylvania region? Contact us today, and we'll get started on a solution right away!

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