What is title insurance?
Title insurance is kind of a weird insurance animal. Most insurance is issued on a casualty basis, which means that the insurance company knows the likelihood of something bad happening and prices their policy accordingly. Basically, the insurance company is just taking on your risk that something bad happens. Title insurance does that, too, but that is only a small portion of the title company role. The far larger part is loss prevention. We conduct an investigation of the history of title to property to find out who has ownership, liens, restrictions, easements, or other interests in the property. We then issue a commitment for title insurance, which gives you an outline of what needs to happen to close on the property. By following the requirements of the commitment we can minimize the claims that anyone can make against the title to your property. We can’t make every problem disappear, because we can’t always discover forgeries and fraud, but that’s where the insurance part, the ri
Title insurance is protection against loss arising from problems connected to the title to your property. Before a property is purchased, it has gone through many ownership changes. We think of all past owners as links in a chain. This is called the chain of title. A weak link in the chain could cause trouble. For example, twenty years ago an owner died and left the property to his heirs. One of the heirs could not be found; but has now surfaced to claim the property. Title insurance covers the insured party for any claims and legal fees that arise out of such a problem. back to top ^ What do I do on settlement day? Answer: 1) If you are the buyer you should do a walk-through of the property you are buying. This is to ensure the seller has taken all of their belongings and cleaned the house. Check for damage that you have not seen before. Also, take readings from all the utility meters (electric, gas, water) depending on where the property is located these may be prorated on the HUD-1
The Coverage Title Insurance provides the purchaser and the lender with comprehensive no-fault protection against title risks inherent in real estate transactions, including: • Defects in title to the property • Unmarketability of title • Liens on the property • Encumbrances and their priority • Survey errors • Adverse claims to property • Fraud and forgery • Invalidity or unenforceability of the insured mortgage on title • Authenticity of registered documents on title • Forced removal of structures on the insured property • Known risks which can be added to coverage to facilitate the transaction • Other matters specified in the policy • Legal services provided by the lawyer with respect to the insured property* *legal services coverage is only available for certain title insurance programs The Title Insurance policy guarantees that the insured owner or lender has a direct claim if the specified title risks cause a loss, regardless of the source of the loss, and without any requirement
Title insurance is an insurance policy protecting the homeowner or the lender against possible financial loss resulting from legal defects from previous title conveyances. Title insurance protects against any hidden hazards that may emerge after closing, such as errors in recording, undisclosed liens, legal encumbrances, forgery, or previously undiscovered heirs. The cost of the policy is determined by the value of the property, and is a one-time fee due at the time of closing. Title insurance also covers the cost of defending the title in court, if necessary.
When a house, building or other property is bought and sold, all the parties involved want to be sure the “title” or transfer of ownership is clear. Title insurance protects the owner and the lender against loss arising from problems connected to the title to the property. Over the years, a home — and the land it stands on — may go through several ownership changes. The “chain of title” describes the history of ownership, with each person or entity listed who owned the land and/or building at some point in time. However, there can be unexpected problems in that chain that could emerge to cause trouble. For example, there may be unpaid real estate taxes or other liens. When title was transferred, someone may have forged a signature, or written a property description improperly. Title insurance covers the insured party for any claims and legal fees that arise out of such problems. Technically speaking, title insurance is an indemnity contract between you (or your lender) and a Title In
