What is title insurance?
Your home is typically your most expensive and important investment. A review of the public records may not discover defects in the title to property. Title insurance is a single premium form of insurance that protects a homeowner, for so long as they may have any interest in their home, against matters that may not be discoverable by an examination of title to real property such as: False impersonation of the true owner of the property Forged deeds, releases or wills Undisclosed or missing heirs Instruments executed under invalid or expired power of attorney Mistakes in recording legal documents Misinterpretations of wills Deeds by persons of unsound mind Tax liens against an owner that may not yet be recorded Deeds by minors Deeds by persons supposedly single, but in fact married Liens for unpaid estate, inheritance, income or gift taxes Fraud Unposted taxes Title insurance will protect you against these types of unknown risks and will pay for defending against any lawsuit attacking
Title insurance is a policy that guarantees to the appropriate party that the property in question is free and clear of all unknown debts, liens and encumbrances. In the event that a previously unknown insurable event arises, it is the duty of the title company to clear the issue at no cost to the claiming party. This includes the fact that the title company will pay for the claiming parties attorney’s fees as well.
When purchasing a home, 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 hazards. Other types of insurance that protect your home focus on possible future events and charge an annual premium. On the other hand, title insurance protects against loss from hazards and defects that already exist in the title and is purchased with a one-time premium.
