What is Title Insurance?

AWhat is Title Insurance?
Title Insurance is provided to buyers of real estate to ensure that the buyer is protected from loss as a result of defects on the title of the property. The mortgage lender also requires Title Insurance on properties for which they are providing funding. Unlike other insurance policies, Title Insurance even protects against past events related to the property’s title, as well as unforeseen future events. Prior to issuing Title Insurance, an extensive title search is done to determine if the title is free of defects. If defects are found, these issues are investigated and are usually able to be resolved. If not, the Buyer has several options, including walking away from the property. Some examples of unexpected defects may include, but not be limited to, unknown heirs coming forward to claim the property, liens that were not previously documented, or incomplete or false records that prevented research from uncovering defects.

Once the title search is completed and the Owner’s Title Policy is issued, the insurance policy is good for the owner’s entire lifetime, even after the property is sold. If, during this time, any previously unknown information regarding the title surfaces, the Owner’s Title Insurance will usually protect them. Owner’s Title Insurance also extends to heirs who inherit the property from the owner.

BWhy do I need Title Insurance?
With the expense and commitment that comes with homeownership, buying a home is one of the most memorable, exciting, and stressful events in your life. Your home is likely your largest, or at least one of your largest assets. You rely on it for the basic needs in life, and you make it a place to call your own. Now, imagine you find out your home is not actually yours at all.

How could this happen? This can happen as a result of defects on the title – liens on the property for example, or problems with previously unpaid taxes, discrepancies in survey maps, or even from unpaid homeowners association dues. By purchasing Title Insurance at closing, you are insuring yourself against such a loss. The research done prior to issuing insurance confirms the title is free from defect. Going forward, if undiscovered defects appear, Title Insurance protects the affected parties from legal fees and other related financial losses, ultimately protecting your monetary investment. Title Insurance provides you the peace of mind that your property truly belongs to you and protects you in the event that another party claims ownership of your property. Most importantly, Title Insurance works to make sure you will not suffer a financial loss as a result of a defect. Title Insurance provides lenders with the same financial security regarding the loan the lender provided for the purchase of the property.

CWhat are the Differences?
When purchasing a property, Title Insurance will be offered to the buyer. The buyer will be required to purchase Lender’s Title Insurance for their lender in order to protect the lender’s monetary investment in the event of a title defect. It is also highly recommended but not required like the above Lender’s Title insurance that the buyers purchase an Owner’s Title Insurance Policy to protect themselves against a monetary loss in the event of a title defect but it is not a requirement. With the Owner’s Policy, the owner pays a one-time premium for the insurance that remains in effect, even after they sell the property. When purchasing an Owner’s Policy, there are two options available from which to choose with differing levels of protection including – Standard and Enhanced. To learn more about these options, choose the various options for title insurance that relate to your transaction.