Why Title Insurance?
When you purchase property, the first thing you need to know is that the property is securely and legally yours and that nothing will arise to take it from you. Even the most thorough search and exam of the public records could fail to show a number of title defects that could pose future problems for the buyer.
Many situations could arise that could place your purchase in jeopardy, a forged will or deed, for example. There are also instances in which a married person attempts to transfer property without the consent of his or her spouse, thus creating a flaw in the title. These, as well as fraudulent impersonations, secret marriages, undisclosed heirs, invalid divorces, and false affidavits are just some of the examples of how one could lose his or her investment.
What is Title Insurance?
Having title insurance means having protection against any legal threat that may arise against your property. When you order title insurance, you initiate a process that begins with a public records search of the property you are purchasing. This includes an investigation of all the current and past owners of that title dating back to the original recorded owner. This type of search reveals the condition, status, and quality of the title to the land you are purchasing. Once the insurance is issued, it will protect you against any title mistakes or threats that would otherwise result in an unnecessary financial loss to you. It is a permanent assurance that your ownership will be legally defended against any valid or invalid claims with absolutely no cost to you.
Who gets the Protection?
There are two types of title insurance, a title insurance for banks and mortgage companies and a title insurance for owners. If there is a mortgage involved in the purchase of a home, the bank will most likely require the borrower to purchase a mortgagee title insurance policy. This type of policy covers only the mortgage lender and does not cover the actual owner. An owner needs an owner's policy of title insurance in order to have his or her own coverage. Title insurance is a unique insurance in that there is only a one time fee with no future renewal premiums and no expiration date. The policy remains in effect as long as the owner or his or her heirs retain an interest in the property. It is a small price to pay for the life long piece of mind and legal stability that title insurance gives the homeowner.