I regret paying extra for buyer's title insurance on my home. (In my state, this is separate from the lender's title insurance policy.) I got sued a week after closing by someone with a meritless claim against the sellers, whose lawyer admitted they only added me to the suit "to put pressure on <sellers> to settle." I paid over $10k in legal fees and got $0 back from the insurance policy. (The claims against me were dismissed on summary judgment as a matter of law, and the sellers eventually won at trial, and later again on appeal, on the remaining claims.)
Just as frustrating, the title company knew about the claim before closing but didn't see fit to tell me. (They asked the seller to indemnify the title company—not me—from potential lawsuits, but the seller refused. The sale closed anyways, with none of this drama on my radar until well into the proceeding lawsuit.)
The reason the policy was worthless was that it had a very narrow definition of what constituted a title defect, and it would have involved another expensive, uncertain battle in court to try to establish that the lawsuit against me should have been covered. It was better to just eat my legal fees and treat them as part of the purchase price of the house.
You paid ten grand in legal fees for a suit that was summarily dismissed? Sounds like not only were you fleeced by the title insurance co, you were fleeced by your attourney too! Maybe there is some reasonable explanation for the high fee, but I am having trouble thinking of what it might be.
Lawyers' time isn't free, and even if you're in the right, it still takes time and money to get a judge to agree with you. South Dakota is like most states, where the expectation is that each of the parties to a lawsuit is responsible for their own costs and fees, regardless of who wins.
"Fun" coda to this story was that about 9 months into the lawsuit, the Plaintiff and his family got hit with an unrelated Federal Civil Rights lawsuit. They own a hotel a few miles from my house, and instituted a blanket ban on Native Americans on the premises, because—in their words—"you can't tell the good Indians from the bad Indians." They put this policy (and their rationale behind it) in writing, if that gives you a hint as to the sort of legal masterminds we were up against.
Just as frustrating, the title company knew about the claim before closing but didn't see fit to tell me. (They asked the seller to indemnify the title company—not me—from potential lawsuits, but the seller refused. The sale closed anyways, with none of this drama on my radar until well into the proceeding lawsuit.)
The reason the policy was worthless was that it had a very narrow definition of what constituted a title defect, and it would have involved another expensive, uncertain battle in court to try to establish that the lawsuit against me should have been covered. It was better to just eat my legal fees and treat them as part of the purchase price of the house.