Do I need an owner’s title insurance policy?

We are purchasing a new home and they want us to pay for title insurance. I do not understand why we need this. Do they not have clear title to the land upon which they are building? We are only purchasing one of the many offered. If this is an absolute necessity? Can it be bought for less elsewhere? — Howard

I unequivocally recom- mend that everyone buying a home get an owner’s title insurance policy. For a low, one-time cost, you get an insurance policy that protects what is most likely your most significant investment.

Mortgage lenders make getting a title insurance policy that protects them a requirement for giving you a loan for important reasons. While it’s uncommon for someone’s homeown- ership to be attacked, if you are unlucky enough to have it happen to you, you will be thankful for the protection.

Your statement that your builder must have had good title to build all of these houses makes sense on the surface, but it may not actu- ally be the case — and your builder may be long gone by the time a problem surfaces, leaving you holding the bag. Title insurance covers you for various threats that affect your ownership, includinga forged deed that happened long before the builder started the project; and a builder selling a home without clearing the liens or going out of business in mid-project and not being able to clear all the liens.

Even if everything is on the up and up, mistakes happen, and things get missed, so you don’t want to be the one who ends up paying for the error. Even without title insurance, it may be possible to sue the offending party, but it will be on your dime and at your risk. This is just not a smart chance to take.

While it does pay to shop for title insurance services, the cost of the actual insurance policy is set by law and should be the same everywhere. However, other settlement costs can vary. Not all title agents are attorneys (although the policy will cost you the same either way), so you may want to make sure you hire an attorney-agent.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. Contact him at www.sunsentinel.com/ askpro or follow him on Twitter GarySingerLaw.