Have you heard ads for home title lock insurance? Are you wondering if it’s worth purchasing?
If you are a homeowner, understanding this type of insurance could be beneficial. We’ll share important information about home title fraud, title lock insurance and whether or not it might be helpful for you.
What Is Home Title Lock Insurance?
Home title lock insurance from Home Title Lock isn’t technically insurance. There’s no monetary payout to you in the event of fraud.
Instead, this service does three things:
- 24/7 monitoring of the title to your home
- Instant alerts if the service detects any suspicious activity
- Connection to the company’s team of “title restoration experts”
It might be nice to have 24/7 monitoring of your home’s title and instant alerts if the service detects any suspicious activity, but there are other ways to safeguard the title to your home.
Furthermore, the website doesn’t clearly explain what the title restoration experts do. Plus, there is the possibility that you could have to pay additional money to get advice from those experts.
How Much Does Home Title Lock Insurance Cost?
Home Title Lock’s insurance policy costs $19.95 per month. You can buy an annual subscription for $199 and save $40.
It’s also possible to buy a four-year subscription for $796, which the company touts as their best offer. However, $796 divided by four is still $199.
If you check the signup page, there are no additional benefits shown for the four-year plan, so you’re not saving money or getting any added benefits by purchasing this plan instead of the annual subscription.
Is Title Lock Insurance Worth Buying?
Whether or not you purchase title lock insurance through Home Title Lock is up to you. Most of the services offered by Home Title Lock are services you can handle on your own for free.
In addition, you can buy home title lock monitoring services through other identity theft companies, such as LifeLock.
LifeLock offers identity theft insurance with home title monitoring and a host of other benefits as add-ons that cost less than a membership to Home Title Lock.
If you want to save money, you can contact your county every few months to ensure there hasn’t been anything filed. You could also monitor your credit report to keep an eye on potential fraud.
What Is Title Fraud?
Home title lock insurance monitors for title fraud, but what exactly is this type of fraud?
Title fraud (also called deed fraud or title theft) happens when an unscrupulous person or persons transfer the deed ownership for your home into another person’s name without your knowledge.
Of course, this is against the law. Unfortunately, it’s usually only a portion of the scam. After the criminal(s) transfers the property out of your name, there is a second step they take.
Usually, the thieves rent the property out if it’s vacant. Otherwise, they may try to sell it to another buyer or work to get a home equity loan on the property.
If they opt for the latter option, they use the equity in the home to gain access to funds that don’t belong to them and make off with the money.
Then, you’re left having to clean up the mess when you find out that there is an additional loan on the home and that the title has been taken out of your name without your knowledge.
While this sounds like a nightmare, you might not have to be as concerned about this potential scam as you’d expect.
How Common is Title Fraud?
There isn’t a ton of research specifically on title fraud numbers. Title fraud could be classified as government fraud because it involves duping governmental employees via the illegal transfer of home ownership.
Consumer Affairs reports that, in 2021, government fraud was quite prevalent. However, many government fraud cases include theft of Social Security disability funds, unemployment funds and more.
Comparatively, home title fraud as a standalone crime is relatively rare. If you’re curious to know who is most at risk for title fraud, it’s probably those who have the most equity in their homes.
What is Title Insurance?
It’s important to note that “title insurance” differs from home title lock insurance.
Title insurance is something you likely purchased when you bought your home. Most mortgage companies require title insurance, and most title companies and real estate companies recommend it.
Title insurance exists to protect the buyer of the home, the seller of the home and the mortgage company from any defects in the title.
For instance, title insurance would cover the occurrence of improperly signed documents during the transfer of the property.
Alternately, it could cover a home equity loan balance owed by former owners but that was not discovered until after the home was sold to the new owners.
However, the title insurance you may have purchased when you bought your home doesn’t cover the fraudulent transfer of your home after you close on the purchase. This is why it’s important to take steps to protect the title to your home.
How Can I Protect the Title to My Home?
The truth is that all home title fraud begins with identity fraud. This is because the fraudster needs to know quite a bit of your personal information in order to pull off this scam.
For that reason, you can help protect the title to your home by monitoring your identity and your home title. Here are some specific tips you can use to protect yourself.
Keep an Eye on Your Property Records
It wouldn’t hurt to check your county’s property records every few months and ensure there’s been no property transfer out of your name.
Look for records of any kind of transaction on your property, including the addition of a second name to the title. If you see anything suspicious, call your county records department or local police department immediately.
Note that many counties have the ability to send you notifications if there is attempted activity regarding the title of your home. Check with your county to see if this service is available. If it is, consider signing up for it.
This can end up doing the same thing that home title lock insurance does, and it can likely be done at no cost to you.
Monitor Your Identity
Since all home title fraud begins with some form of identity fraud, it’s a good idea to monitor your credit report and other aspects of your identity regularly.
You can do this yourself by monitoring your credit and searching for suspicious activity. Another strategy is to use one of the best identity theft protection companies and have them monitor your identity for you.
Ultimately, finding some way to keep a regular eye on your credit report and online information to help stop fraudsters quickly can help. For example, searching for new accounts that you haven’t opened, credit line increases and other new activity is wise.
You can also consider putting a lock on your credit report so that no new accounts can be opened.
Practice Safe Online Behavior
It’s wise to use caution when you’re shopping or browsing online. Be careful where you give out your name, Social Security number, birth date and other personal information.
Don’t share your credit card number and information online unless you’re certain of whom you’re dealing with. Be discerning about the services you sign up for since there’s always a risk of security breaches and hacking of personal information.
Also, check out the security information a company uses when you’re using online services.
Don’t Fall for Phishing or Other Scams
Importantly, don’t fall for phishing or other scams. Avoid emails that ask you to send or divulge personal information.
Additionally, don’t fall for phone calls that do the same. If someone calls or emails you and asks for money, personal information or credit card information, assume it’s a scam, even if that person says they’re a trusted relative or friend.
Hang up, then look online for the actual number of the company that the rep claims to be calling from or the person they say they are and call to verify whether they were calling.
If you do your research and discover the call or email truly was fraudulent, call your local police department and report the incident.
Summary
Home title fraud does happen. However, there are many hoops that a fraudster needs to jump through to get your home out of your name and into theirs.
What’s more, there are additional steps they need to complete to get a home equity loan in their name using your home or to transfer ownership of the home to a third party.
Work with your county property records department to keep an eye on your home’s title and to stop any potential fraud in its tracks.
While it’s not a common occurrence, don’t be blind to the possibility of home title fraud. Instead, keep an eye on your home title, your credit report and your other personal information to protect yourself and your home.
