Have you heard the ad lately on the radio that prompts you to invest in title lock insurance or risk getting your home stolen? A home is one of the biggest investments an individual makes over their lifetime, and listening to the ad may have stirred up some fear. Is it worth purchasing title lock insurance, or are there other safety measures that can keep your home safe from property thieves?
In this article, we’ll take a closer look at title lock insurance and its necessity to protect consumers.
What Is Title Lock Insurance?
It is essential to understand that title “lock” insurance is not “title” insurance. The Maryland Insurance Administration describes title insurance as a policy that protects you from problems with an ownership title when you buy real estate. The problems on the title of the property may have existed before you purchased the real estate and may include:
- Unpaid property taxes
- Unknown liens
- Fraud or forgery
- An unknown heir who claims the property is under their ownership
- Other defects in the title
On the other hand, title LOCK insurance is not insurance but a service that monitors the deed to your real estate and alerts you when it’s transferred out of your name. Although the name may suggest that these services lock your title and protect it from an unauthorized transfer, it does not do that.
Do You Need Home Title Lock Insurance, or Are There Better Alternatives?
In the United States, title lock insurance continues to be heavily marketed, but is it necessary?
The reality about title fraud is that it is rare and hardly ever successful. These companies offering title lock insurance are trying to sell their services on the basis that an individual might steal your title, and you need protection against that.
However, anyone who transfers a title of your home from your name to their own is an act of fraud and completely void.
Title lock companies charge you for helping identify whether the title of your home is in your name or another person. Why pay for such services when you can access such records for free?
How Can You Monitor Your Identity to Stop Fraud?
The best way to stop fraud is to monitor your identity and take immediate action to prevent further damage. Here are a few things you can do to monitor and identify fraud:
- Be mindful of missing bills
- Check your credit with three major credit reporting companies
- Periodically check the title of your home with the land records office
Title lock insurance does not lock your home’s title nor protect you from a fraudulent transfer. The best way to protect yourself from fraud is to avoid giving out your social security number, personal information, or financial details.
Always destroy documents with your personal information that you no longer need. If you suspect fraud, freeze your credit reports to prevent the fraudster from opening another bank account in your name.