The answer is an emphatic “YES.”

It is true that most title insurance policies never have any claims against them, so some people think they are a waste of money. But in the unusual cases where title problems arise, a policy of title insurance can save you disastrous losses--perhaps even the loss of your property.

Here's just one scenario among thousands that can cause terrible problems: You are in contract to buy a home from a husband and wife. The week before closing the wife is called unexpectedly out of town by a family emergency. The husband has a friend who is a notary public, who also knows the wife. The notary talks to the wife on the phone and is assured she wants to sell and is “OK” with the husband signing her name to the documents. (Please note that the notary public is violating the law here and when caught would face stiff penalties including possible jail time.)

This may seem like no big deal since the wife really did want to sell the home at those terms. But let us suppose that this husband and wife get a divorce a year or two later and it’s a nasty one. They are fighting and clawing for every dime and every way to spite the other party. The wife remembers she never signed the closing papers, and the house is now worth $50K more than what you paid for it. Suddenly, you could be drawn into a treacherous legal battle where the wife demands that you move out of “her house” or at least write her a big check to go away. Even though you knew nothing about what went on, this could still be a big problem for you. But since you have title insurance, the battle belongs to your insurer. 

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