Why Title Insurance is Essential for Every Homebuyer
September 4, 2025
When buying a home, most people focus on location, condition, and price.
However, there's another crucial factor that often gets overlooked: the title.
Title insurance protects buyers and lenders from hidden risks tied to property ownership — issues that could jeopardize your legal claim to the home.
Kari Waack of First American Title joined our Local Home Loan Experts on the At Home on the Lakeshore podcast to explain why title insurance matters.
The views and opinions expressed by the title insurance agent quoted in this article are their own and do not constitute an endorsement by UnitedOne Credit Union. You are encouraged to evaluate your own individual needs and seek guidance from title insurance professionals before making any decisions.
“Unlike homeowners insurance, we don’t cover the building,” said Waack, who has more than 20 years of experience with First American Title. “We ensure the title is transferred free of liens or encumbrances — and that buyers understand any risks involved.”
Title insurance covers past issues like unpaid taxes, judgments, liens, or easements that may surface after closing.
“Errors in legal descriptions happen more often than you’d think,” Waack said. “Title insurance protects against claims stemming from prior ownership.”
There are two main types of title insurance:
- Loan Policy – Protects the lender; paid by the buyer.
- Owner’s Policy – Protects the buyer; typically paid by the seller.
Before title insurance became standard, buyers relied on an abstract of title — a historical record without any guarantees.
“It was simply a history of the property from the beginning of time to the current owner,” Waack said. “It provided no insurance.”
Title insurance has only become prevalent in the last 30 years, offering a layer of protection that abstracts never could.
Modern title companies offer a range of services beyond basic insurance. Signing options now include in-person notarization, remote online notarization (RON), and mobile notary services.
“If the lender allows, we can send a certified notary directly to your home,” Waack said. “Or you can meet face-to-face online and e-sign documents through a verified system.”
Additional title insurance services include:
- 1031 Exchanges – Let investors defer taxes on property sales.
- Home Warranty Programs – Cover systems and appliances.
- Bifurcated Closings – Use separate title companies for buyer and seller.
When dealing with title insurance, a homebuyer should be prepared to be asked for their social security number.
“On the seller side, we need it because the government requires us to obtain something called FIRPTA — the Foreign Investment in Real Property Tax Act,” Waack said. “It’s how they track who’s selling property and whether they’re paying income tax on it.”
The social security number is also required when recording the new deed through the state’s e-return system.
In Wisconsin, there are three main ways to take a title:
- Joint Tenancy – Equal ownership with automatic transfer to surviving owner(s).
- Survivorship Marital Property – For spouses; ownership passes directly to surviving spouse.
- Tenancy in Common – Ownership doesn’t automatically transfer upon death and must go through probate.
“Joint tenancy and survivorship marital property are similar,” Waack said, “but knowing the differences helps you make informed decisions.”
Title insurance may not be the most glamorous part of buying a home, but it’s one of the most important. It ensures that your investment is protected from the ground up — starting with the very right to call it yours.
As is the case with any type of home loan, it’s best to discuss your situation and options prior to putting in an offer on a house. The Local Home Loan Experts at UnitedOne Credit Union will help you navigate the process and are your trusted source in Manitowoc and Sheboygan for all your home loan needs.