3 scenarios where it is crucial to possess an owner's title insurance policy.

It is protection for all kinds of situations you might not think could happen to your buyer.

In many instances when a homebuyer comes to the closing table to sign what seems to be a mountain of paperwork legally binding them to a property, they do not always understand the extra cost for title insurance.

What many people do not understand — or it is sometimes explained improperly to them — is that title insurance is a one-time fee that protects homeowners.

There are also different levels of title insurance coverage. There is the “Standard Owner’s Title Policy” and the “Enhanced Owner’s Title Policy.”

Title insurance protects or indemnifies a home or property purchaser against any loss resulting from title defects, whether these defects are known or unknown at the time of the sale or refinance.

Here are some of the basic items that protect the homeowner with an extended coverage title policy:

• Mechanic’s lien coverage
• Fraud/forgery
• Judgments
• Defective recordings
• Third-party claims (against title)
• Policy covers anyone who inherits the property from you
• Prior recorded liens not disclosed in the title policy