What is Title Insurance?
Do I need Title Insurance? Title insurance is a form of insurance or agreement made to cover the loss or damage caused by title defects, liens or any other encumbrance related to the ownership of a particular property. In simple words, title insurance is purchased by an individual who is lending money on a mortgage for the purchase of a property. The carrier requires the purchaser to pay a lump sum, usually at the time of closing.
These title insurance companies then keep a tight hold of the title or duplicates of the records and they also hire skilled title examiners and arrange for all kinds of conveyance and transfers accordingly. These title companies also conduct title research in which a “certificate of title” is furnished, that indicates the findings of the examiner or owner in reference to the property involved. Title insurance companies are only responsible for the lack of skill, care or mistakes made on the part of the owner. However, the insurer of the title is accountable for the validity and authority of the title on all occasions.
Why Do You Need Title Insurance?
Title insurance for property owners and lenders, also known as an ’Owners Policy’, provides a wide range of benefits to all those involved in a real estate transaction. Its onetime fee is valid for as long as the owner or his inheritors have a share or an interest in the property involved. It helps avoid title problems, such as mistakes in examining the records, undisclosed inheritors, falsification and errors in deeds.
Title insurance policies protect the purchaser of a property and will cover all the claims arising out of any issue related to the title to the property. Not only will this insurance policy help you, but it also protects your heirs for as long as they have the title of the property in their hands, even if they make the mistake of selling the warranty deed.
Title insurance also protects the owner/seller of a property who is already insured by an owner’s title insurance policy by providing the assurance of the title to be marketable at the time of selling a property. It also protects the owner/seller from financial damages, such as, if the title is rejected by a future purchaser of property or if the buyer is sued because of a breach in property warranties.
A policy of title insurance also offers the lender of a mortgage security and coverage for any loss as a result of any dispute regarding the title of the property that is up for sale. This security remains for as long as it takes for the matter to be solved.
Apart from the benefits offered to the various parties involved in a real estate transaction, title insurance companies also providers numerous services for the community in general, as they offer considerable assistance to public officials and also help with reorganizing and indexing public records.
Now that you are familiar with title insurance and why you need it, do make sure that the title insurance company you choose provides all the benefits mentioned above.