Covering All Your Bases: The Need for Title Insurance and Property & Casualty Insurance


When you purchase just about any type of insurance policy, what you’re essentially buying is peace of mind — and title insurance is no different. As a homebuyer, you can breathe easy knowing your title insurance policy is designed to protect you and your right to ownership of your property.


Unlike other types of insurance, however, title insurance protects you from the past. You may have heard about another type of insurance for homebuyers that protects you from the future. It’s known as property & casualty insurance (i.e. homeowners insurance), and it protects you and the property you own.


Let’s take a look at both of these insurance policies in more detail and discuss their differences and why you need them.



What Is Title Insurance?


Title insurance is a type of indemnity insurance that protects lenders and homebuyers from financial loss resulting from defects in a title to a property. Borrowers commonly purchase lender’s title insurance when closing on their home in order to protect the lender. Conversely, in Michigan owner’s title insurance is paid for by the seller to protect the buyer’s equity in the property.


Real estate transactions must have a clear title to ensure the property is free from liens prior to the policy being issued.  The title insurance protects against damage and loss occurring from liens, encumbrances and other defects in a property’s title that were not found prior to closing such as back taxes, estate issues, flawed records, incorrect ownership, falsified documents, and erroneous surveys.


What Is Property & Casualty Insurance?



As mentioned above, property & casualty insurance is a kind of coverage that protects you and the property you own, including your car and home. Specifically, the property insurance side protects your personal property, while the casualty part offers liability coverage in the event that you’re legally responsible for an accident creating injuries to another person or damage to someone else’s belongings.


You may find, property & casualty insurance can be bundled together into a single insurance policy that may include homeowner’s, car, condo and other insurance. If a visitor falls inside your home and breaks their leg, if your home is vandalized and damaged, or if a covered weather incident wreaks havoc on your home, property & casualty insurance assists you in paying all the necessary bills and helping you fix your personal property.



What Is the Difference Between Title and Property & Casualty Insurance?



As you can see, there are many differences between title insurance and property & casualty insurance, but the main dissimilarities have to do with the frequency of premium collection, as well as risk elimination. With title insurance, you pay the premium once, at the time of closing and you are covered for as long as you own the property.  With property & casualty insurance, you’ll most likely pay monthly premiums for the life of the policy.


In addition, as stated above, title insurance is primarily concerned with risk elimination and covering events that happened in the past, while property & casualty insurance covers events that may happen in the future.



Which Type of Insurance Do You Need?



You will need both title and property & casualty insurance.  These policies will ensure that your experience of purchasing a new property will be a smooth one, and your post-purchase experience will be protected, too.



We Can Help You Protect Your Past, Future and Everything in Between 



At Vanguard Title Company, our staff of skilled title and closing professionals has successfully handled thousands of real estate transactions throughout Michigan since 1987. Our team of knowledgeable title and closing specialists have your best interests at heart when it comes time to purchasing title insurance.

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