Why you need title insurance for your home
PROTECTING YOUR INVESTMENT IN A HOME
Your home is most likely one of the largest single investments you may make in your lifetime. To protect your investment you surely maintain homeowner’s insurance to protect against damage to your home and belongings. In a similar manner, title insurance protects your ownership in the home against hidden issues which could materially and adversely affect or threaten ownership or the rights you have to possess and use your home.
Your use of the home and property, and therefore the status of your title, will likely be subject to certain legal interests which are beneficial, such as utility or access easements. Your use, and therefore title, may also be limited by other legal matters, such as local ordinances, or perhaps covenants and restrictions. It is these interests found in the public records which are disclosed by your title commitment.
However, there may also be certain rights or claims asserted by others which may limit or restrict your use and enjoyment of your home and property. These limitations or restrictions can be devastating and financially costly, and it is these risks which proper title insurance can manage.
FORMS OF TITLE INSURANCE
There are two basic forms of title insurance. The first is for lender or mortgagee protection. The second is called owner’s coverage. In each case, the coverage is just as indicated, either for the lender's protection or the owner's protection. In today's financial markets, nearly all lenders require mortgagee title insurance as security for their investment in you and the real estate when you are borrowing funds for the purchase of a home. The lender's policy will expire when your mortgage is paid off, but your owner’s title insurance policy will remain in force for as long as you have an interest in the insured property.
WHAT IS REALLY BEING INSURED?
An important part of title insurance is its emphasis on risk elimination. This gives you, as the policyholder, the best possible chance for avoiding a title claim and/or loss.
The title insurance process begins with Certified Title performing a search of the public land records in the county where the property is located. The search will attempt to locate all documents affecting the real estate concerned. With these documents in hand, an examination is conducted by the title agent or attorney on behalf of it's underwriter to determine whether the property is insurable. The examination of evidence from a search is intended to fully report all “material objections” to the title found in the public record.
Title insurance offers financial protection against these and other covered title hazards. Subject to the terms and provisions of the applicable policy, the title insurer will pay for defending against an attack on your title as insured, and will either perfect the title or pay valid claims - all for a one-time premium paid at closing.
Your home is one of your most important investments. Before you go to closing, ask about your title insurance protection, and be sure to protect your home with an owner’s title insurance policy.
Why You Need Insurance