What is title insurance?
Title insurance is actually a process, with the insurance policy being the end product. This process starts with a comprehensive search of public records to determine if any liens or other encumbrances are attached to the title. During the search, detailed information from many sources is gathered and reviewed, including tax records, federal, state and local records, court judgments, deeds and an evaluation of whether the property characteristics are accurately reflected by the information on the title. Not surprisingly, one in four title searches uncovers some problem that must be rectified prior to the closing. The end result is that the buyer is receiving clear title to the property.
When you purchase a home on Martha’s Vineyard, instead of purchasing the actual building or land, you are really purchasing the title to the property – the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and even bring financial loss. Title insurance protects against these types of title problems for Martha’s Vineyard real estate and brings confidence and certainty to the parties at a real estate closing that the title of the subject real property is as represented and expected. The title insurer offers financial protection and will indemnify and defend against an attack on covered title hazards as insured, and will either perfect the title or pay valid claims.
Title insurance is one of the most esoteric aspects of buying and owning a home. But that doesn’t mean the subject isn’t important or worth the effort to understand. Customarily, title insurance comes in two formats: An owner’s policy, which protects the owner of the property, and a lender’s policy, which protects the lender who holds a loan secured by the property.
