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Why
Title Insurance? A home is usually the largest single
investment any of us will ever make. When you purchase
a home, you will purchase several types of insurance
coverage to protect your home and personal property.
Homeowner's or hazard insurance protects against loss
from fire, theft or wind damage. Flood insurance protects
against rising water. And a unique coverage known as
title insurance protects against hidden title hazards
that may threaten your financial investment in your home.
Protecting
your largest single investment!
Title
insurance is not as well understood as other types of
home insurance, but it is just as important. You see,
when |
purchasing
a home, instead of purchasing the actual building or land, you
are really purchasing the title to the property - 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 hazards. Other
types of insurance that protect your home focus on
possible future events and charge and annual premium. On
the
other hand, title insurance protects against loss
from hazard and
defects that already exist in the title and is
purchased with a one time premium.
Two Kinds
of title insurance benefit you in two ways
There
are two basic kinds of title insurance:
 Lender
or mortgagee protection
Owner's
coverage
Most
lenders require mortgagee title insurance as security for
their investment in real estate, just as they may call
for fire insurance and other types of coverage as investor
protection. When title insurance is provided, lenders are
willing to make mortgage money available in distant locales
where they know little about the market.
Owner's
title insurance last as long as you, the policyholder - or
your heirs - have an interest in the insured property. This
may be after you have sold the property.
Depending
on local practices and stat law where they property is located,
you may pay an additional premium for an owner's policy
or you may pay a simultaneous issue charge - usually smaller
amount - for the separate lender coverage. You may even
split settlement costs with the seller for the lender or
owner's policy.
What
does your premium really pay for?
An important
part of title insurance is its emphasis on risk elimination
before insuring. This gives you, as the policyholder, the best
possible chance for avoiding title claim loss.
Title
insuring begins with a search of public land records affecting
the real estate concerned. An examination is conducted
by the title agent on behalf of its underwriter to determine
whether the property is insurable. The examination of evidence
from a search is intended to fully report all "material
objections"
to the title. Frequently, documents that don't clearly
transfer title are found in the "chain", or history
that is assembled of documents that can present concerns:
Deeds,
wills and trusts that contain improper wording or incorrect
names
Outstanding
mortgages and judgments, or a lien against the property
because the seller had not paid taxes
Easements
that allow construction of a road or utility line
Pending
legal action against the property that could affect the purchaser
Incorrect
notary acknowledgements
Through
the search and the examination, title problems are disclosed
so they can be corrected whenever possible. However, even the
most careful preventative work cannot locate all hidden
title hazards.
Hidden
title hazards - your last defense
In spite
of all the expertise and dedication that go into a title
search and examination, hidden hazards can emerge after closing,
resulting in unpleasant and costly surprises. Some examples
of hazards include:
A
forged signature on the deed, which would mean no transfer
of ownership to you An
unknown heir of a previous owner who is claiming ownership
of the property Instruments
executed under an expired or a fabricated power of attorney Mistakes
in the public records
Title
insurance offers financial protection against these and
other covered title hazards. The title insurer will pay for
defending against an attack on the title as insured, and will
either perfect the title or pay valid claims - all for a one
time charge at closing.
Your
home is your most important investment. Before you go to closing,
ask about your title insurance protection, and be sure to protect
your home with an owner's title insurance policy.
For
more information that can help you better understand title
insurance please contact our offices today
and talk with one of our representatives today! |
