Can "owner's policy" be waived at buyer's choice

**ilyae** · 03-02-2011, 02:49 PM

Dear Community,

I have had this question in my mind for a few years now, and the answer seem to be fuzzy every time. I would be getting my 4th mortgage in 5 recent years so I am quite familiar with the overall process.

Lender's Policy protects bank's interest in the title, and they require it - I understand and agree with that.

Owner's Policy protects me the purchaser. If I choose not to purchase this policy, I believe it is my right to waive and not to pay for it. Title company will still perform title search per separate required fee, but I will have no insurance going forward. Hypothetically speaking, let's say I know the history of the property through title checks with previous mortgages, and I agree to not having insurance.

(Disclaimer: readers of this post should know this applies to special circumstances, and not having owner's policy has potential dangers.)

So my question is simple: can I choose to to waive owner's policy? Can any party (lender, escrow, title) legally require me purchase this policy if my choice would be not to purchase?

Thanks in advance.

**ilyae** · 03-03-2011, 01:16 PM

Hi. Any ideas please?

**markbrian** · 03-04-2011, 07:03 AM

It is probably your choice but I would not advise it, even if there are special circumstances. I do know some attorneys in my area will not close a real estate transaction unless the buyer purchases title insurance. It is their choice to NOT close one where the buyer refuses to purchase title insurance. This is because the attorney wants protection against future claims by a buyer that didn't purchase title insurance even though everyone advised them to do so.

So in some ways it is not a law, but rather a company policy.

Insurance, whether title insurance, home owners, health, whatever is a good idea IMHO.

**lvagent** · 03-07-2011, 08:21 PM

It's not going to make you or break you. Also, there was a lawsuit I heard of a few weeks back in California in which title made a mistake in the search, and the buyer purchased based on the title search provided. The buyer sued the title company for the 200,000 lost and the judge ruled in favor of the title vcompany, why? The buyer didn't purchase title insurance.
Good luck, and minus the special circumstances, the disclamer in the post applies.