We are often asked: what's the difference between a title exam to provide title insurance and an opinion of title completed by an attorney? The differences mainly come down to cost, the level of risk, and remedies offered to the landowner.
A title opinion is generally completed by an attorney and discloses only defects which are found from a review of public records. The opinion is a statement of that attorney's professional judgment. If the attorney is wrong about the owner's rights to the property, the owner's remedy is a claim for malpractice against the attorney who provided the opinion. Often times this results in having to file suit against the attorney Opinions of title can be issued for reasons such as obtaining a mortgage, verifying easements, encroachments, and oil and mineral rights. In addition, there are opinions for drilling, acquisition, and other transactions. Given its limited level or protection, a title opinion is generally less expensive than owner's title insurance.
Owner's Title Insurance
Similar to a title opinion, owner's title insurance policies also research and review available public records, but title insurance goes on to insure against other hidden risks which are not discoverable during searches of public records such as fraud, forgery or mis-indexed items just to name a few. It also covers those items that might be missed by the examiner. As insurance, it provides remedy in the form of payment and damages relating to claims that result from a defect in title. Given this additional level of protection, owner's title insurance is generally more expensive than a title opinion.
Knowing the difference between these two products can help you choose the one that matches your property and risk concerns. As you consider the pros and cons of a title opinion vs. owner's title insurance, remember that neither an owner's title insurance policy nor an attorney's title opinion is a guarantee regarding the status of title. It is always an unfortunate possibility for an owner to lose a title based on an undiscovered title defect. With owner's title insurance you at least have some piece of mind about your financial investment.