Why do I need title insurance?
A title insurance policy guarantees that the title to the property is free of "hidden" liens, hazards or human errors. When title insurance is purchased an experienced title examiner performs a comprehensive search of the public land records to determine if any liens or other encumbrances are attached. Although this search is intended to report all material title objections, there is always a chance that the substantial issues may go undetected. For example, an unknown heir of a previous owner who has a valid claim against the property, unrelinquished marital rights of previous owners, or invalid signatures. An Owner's policy protects your interest in the real property against such unforeseen threats to your ownership.
To protect against risk, a lender will require assurance that the title to the property is clear; and this is done through the issuance of a loan policy. The lender's policy covers the lender only, while the buyer is unprotected without the issuance of a separate owner's title insurance policy.
For a one-time premium, paid during the closing process, an owner's title insurance policy protects against future losses arising out of events that may have happened in the past. Your policy serves as a written guarantee that your underwriter will undertake, at its own expense, the defense of your title in all legal actions or proceedings alleging title to be other than as insured.
What does Title Insurance Cover?
- Forged deeds, releases or wills
- Fraud in connection with execution of documents
- Clerical errors in recording legal documents
- Wills not properly probated
- Undisclosed or missing heirs
- Dower or curtsey rights of ex−spouses of former owners
- Unsatisfied claims not shown on record
- Deeds executed under expired or false powers of attorney
- Liens for unpaid taxes
What is a Title Search?
A search made by a title company to determine whether or not the seller actually owns the property. The search will also provide information such as the history of ownership to the property, and determines if any liens, open permits or illegal extensions exist on the property.