What is Owner’s Title Insurance?
Fire insurance protects you against losses from fire. Collision insurance guards you against the cost of a damaged car. Theft insurance—well, you get the idea. Title insurance protects your title to real estate that you are about to acquire. To understand why title protection is essential, we need to consider real estate for a moment.
Your Ownership of Real Estate:
Real Estate has always been considered our most valuable possession. It is so basic a form of wealth that many special laws have been enacted to protect ownership of land and the buildings which stand on the land.
Whenever you buy property that the owner who is selling it to you has extremely strong rights as do his family and heirs. Also, there may be others—in addition to the owner—who have “rights” in the property you are going to buy, perhaps governmental bodies, Lien Holders, or contractors, for example.
Some of the things a title search uncovers are any unpaid taxes or mortgages, judgments against previous owners, easements, and many other court actions or recorded documents that can affect title to real estate.
Protecting You Against Hidden Risks:
Protection against loss from claims on real estate that cannot be discovered by examination of the public records is the second part of the twofold benefit which the Title Insurance provides.
For example, the title to the home which you have paid for—and to which you have received a deed—could be threatened or lost by such circumstances as a forgery, confusion due to similar names, or error in the records. These contingencies will be covered in your policy of title insurance.
How Does a Title Insurance Policy Protect Against These Dangers?
If a claim is made against your title as covered by your policy, the title protects you by:
Defending your title, in court if necessary, at the Title Company’s expense.
Bearing the cost of settling the claim if it proves valid, in order to perfect your title and keep you in possession of your property.
10 Common Title Problems
Play It Safe
These and other issues are often covered by an owner’s policy of title insurance. When you buy a home, make sure you’re protecting that investment with title insurance.