How does title insurance protect against hidden risks and defects?
Title insurance defends you in a lawsuit attacking your title, and either corrects the title problem or pays the insured’s losses up to the face amount of the policy. The policy also protects you after you sell the property for defects occurring prior to your ownership that cause a loss to a purchaser if the title was warranted by you. For instance, a seller may forge a signature of another, creating a loss for a new owner. Other problems that can occur are fraud, improper court proceedings, missing heirs, incompetency of previous seller(s), recording mistakes, and unfiled liens.
