Title insurance is an insurance policy issued by a title insurance company to the buyer of real estate and his/her lender.
Why do I need title insurance?
The purchase of a home is sometimes the single largest investment one would make. Who would protect you if your interest in the property itself was impaired due to a lien or claim in which the validity of your ownership was questioned? Claims arise from title defects such as, but not limited to, undisclosed heirs, recording mistakes, incorrect legal descriptions, outstanding mortgages and lost or forged deeds. If there is a title defect, you could lose your property, but the simplest and most efficient way to protect yourself from these defects is the purchase of title insurance.
What does title insurance protect against?
- Here are just a few of the most common hidden risks than can cause loss of title or create an encumbrance on title:
- False impersonation of the true owner of the property
- Forged deeds, releases or wills
- Undisclosed or missing heirs
- Instruments executed under invalid or expired power of attorney
- Mistakes in recording legal documents
- Misinterpretations of wills
- Deeds by persons of unsound mind
- Deeds by persons supposedly single, but in fact married
- Liens for unpaid estate, inheritance, income or gift taxes
What protection does title insurance provide against defects and hidden risks?
Title insurance will pay for defending against any lawsuit attacking the title as insured, and will clear up title problems or pay the insured’s losses. For a one-time premium, an owner’s title insurance policy remains in effect as long as the insured, or the insured’s heirs, retain an interest in the property, or have any obligations under a warranty in any conveyance of it. Owner’s title insurance, issued simultaneously with a loan policy, is the best title insurance value a property owner can get.
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