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Title Insurance for Peace of Mind


By Sadiya Anjum

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Imagine this: you buy a beautiful picture-perfect house, settle down, have kids, watch them grow up, then one day someone knocks on your door and claims the house is his? He even produces an old will to prove it. You go to court and contest this, but what if you lose? Title insurance will protect you in such an event. Title insurance can protect the property owner from financial losses rising from dispute over the title of the property.

When real estate transactions occur, a title search is done to ensure that the seller is the actual legal owner of the property and is the one handing it over to the buyer. Public records and legal documents are reviewed and checked for any unsettled claims or liens against the property. Some times when discrepancies are found, they are corrected before the title is handed over to the new owner (buyer).

Despite this thorough search, it is wise to get a title insurance. If you are obtaining a mortgage for that property, it is most likely that the lender is going to insist that you buy title insurance (lender policy). In this case, the insurance protects the lender: if any disputes arise, the insurance company will settle the unpaid mortgage. You are required to pay for this insurance but once you clear your mortgage, this insurance ceases to function. Hence it is essential that you purchase an owner’s title policy to protect yourself. If dispute arises later, this insurance will cover for your court fees and repay your investment in the property up to the full value of the policy. The owner’s title policy is optional unlike the lender policy. Some times the lender may even ask you to take out a policy for both of you.

A unique characteristic of title insurance when compared to other types is that it protects for losses arising from events which have occurred prior to the issuing of the policy. From the date of the policy, coverage extends backwards to an indefinite period. This basically means that the insurance covers for title errors made before the policy was taken out, not from errors arising after the date of issue of the policy.

Before any property is passed on from one person to another, a thorough title search is conducted as mentioned earlier. But some times errors are made, differences are looked over and hidden defects remain hidden. Some of these defects could include misinterpretation of wills, forgery, missing heirs, deeds by people of unsound minds etc. It is best if one gets title insurance as you do not want anyone to get a hold of your home later. Title insurance is essential since you can ensure peace of mind for yourself and your heirs for as long as you own the property.

Article Source: ChoiceOfHomes.com - Real Estate Listings Online

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