What Is Title Insurance?
The title of a home is what gives you legal rights to occupy the property. The title could include limitations due to claims others have asserted over the property. This could limit how you can use the property, and may cause financial loss. When you purchase title insurance, it protects against these types of issues with your title. Title insurance is purchased as a one-time premium, as opposed to other types of home insurance, which require annual premiums. This is because it protects against existing hazards instead of offering protection for hypothetical future issues.
Types Of Title Insurance
There are two general types of title insurance:
- Lender/mortgagee coverage: Most lenders require title insurance. This protects their investment and allows them more flexibility to lend mortgage money.
- Owner’s coverage: Owner’s insurance is not required, but is recommended. It lasts as long as you or your heirs have interest in the property, which may be even after you have sold it.
What Does Title Insurance Insure?
The title insurance process starts by research into the public records of the property in question before closing. This reveals any pertinent information to determine whether insurance is possible. This could reveal title hazards, such as outstanding mortgages, deeds or trusts with incorrect or misspelled information, pending legal action against the property, and more. With this knowledge, any issues may be resolved to prevent issues in the future. However, even with these preventative measures in place, other title defects may present themselves, perhaps due to mistakes in the public records or other issues. Title insurance protects you financially in the event of these issues presenting themselves after closing.
At The De Bruin Law Firm, we are experienced in a variety of title-related services, including title examinations and title insurance policies. Contact us today to learn more.