Source: The San Diego Union-Tribune
Writer: Robert J. Bruss,
a San Francisco lawyer, broker &
nationally syndicated real estate writer.

Title Insurance (August 20, 2006)
Let's assume I purchased my home 10 years ago for $150,000 and obtained an owner's title insurance policy at that time. Suppose I sell it now for its current $400,000 market value but I discover I don't own marketable title. Will the title insurance pay me $150,000 or $400,000?

Your owner's title insurance policy will pay you, in the event of a 100 percent total loss, the $150,000 policy limit at the time of your purchase. However, total title losses rarely occur. In a situation such as you describe, the title insurer will attempt to negotiate a settlement with the title claimant so you will not lose the property. If that isn't possible, perhaps because your grantor forged a signature on your deed and the true owner or the heir now claims ownership, the most the title insurer would have to pay you is the $150,000 policy limit in this example