| WHY TITLE INSURANCE IS IMPORTANT |
Real estate has always been considered man's most valuable possession. It is so basic a form of wealth that many
special laws have been enacted to protect ownership of land and the buildings which stand on the land. These laws, as
well as homeowner or hazard insurance, flood insurance, and title insurance, are there to protect this valuable possession.
When you purchase a home, you will purchase several types of insurance coverage to protect both your home and
personal property.
Although title insurance is not as well understood as the other types of home insurance, it is still just as important. When
you purchase a home, instead of purchasing the building or land, you are really purchasing title to the property -the right
to occupy and use the space. That title may be limited by rights or claims asserted by others, which may limit your use
and enjoyment of the property and even bring financial loss.
Title insurance protects against these types of hazards. Unlike other types of insurance, title insurance is purchased with
a one time premium and protects against loss from hazards and defects that may already exist.
LOAN POLICY (PROTECTS LENDER ONLY)
Most lenders require mortgagee title insurance to protect their investment. Just as they may call for fire insurance and
other types of coverage as investor protection.
OWNER POLICY (PROTECTS PROPERTY OWNER)
Owner’s title insurance protects you the homeowner against loss and lasts as long as you, the policyholder– or your
heirs– have an interest in the property.
special laws have been enacted to protect ownership of land and the buildings which stand on the land. These laws, as
well as homeowner or hazard insurance, flood insurance, and title insurance, are there to protect this valuable possession.
When you purchase a home, you will purchase several types of insurance coverage to protect both your home and
personal property.
- The homeowner or hazard insurance protects against loss from fire, theft, or wind damage.
- Flood insurance protects against rising water.
- Title insurance is a unique coverage that protects against hidden title hazards that my threaten your financial
investment in your home.
Although title insurance is not as well understood as the other types of home insurance, it is still just as important. When
you purchase a home, instead of purchasing the building or land, you are really purchasing title to the property -the right
to occupy and use the space. That title may be limited by rights or claims asserted by others, which may limit your use
and enjoyment of the property and even bring financial loss.
Title insurance protects against these types of hazards. Unlike other types of insurance, title insurance is purchased with
a one time premium and protects against loss from hazards and defects that may already exist.
LOAN POLICY (PROTECTS LENDER ONLY)
Most lenders require mortgagee title insurance to protect their investment. Just as they may call for fire insurance and
other types of coverage as investor protection.
OWNER POLICY (PROTECTS PROPERTY OWNER)
Owner’s title insurance protects you the homeowner against loss and lasts as long as you, the policyholder– or your
heirs– have an interest in the property.
A "ONE TIME" PREMIUM PAYS FOR COVERAGE
An important part of title insurance is its emphasis on risk elimination before insuring. This gives you, as policyholder, the
best possible chance for avoiding title claims and losses.
Your deed does not guarantee you clear title. A “deed” is only an instrument by which a seller transfers his or her
ownership, whatever it may be, to you. It is not proof that the person described as seller is the actual owner. It does not
disclose or determine what rights, liens, or claims may be outstanding against the title.
Title insurance begins with a search of public land records affecting the real estate concerned. The examination of
evidence from the search is intended to fully report all “material objections” to the title. This will determine whether or not
the property is insurable.
Frequently, documents that don’t clearly transfer title are found in the history that is assembled from the records in a
search.
Some examples of this are:
best possible chance for avoiding title claims and losses.
Your deed does not guarantee you clear title. A “deed” is only an instrument by which a seller transfers his or her
ownership, whatever it may be, to you. It is not proof that the person described as seller is the actual owner. It does not
disclose or determine what rights, liens, or claims may be outstanding against the title.
Title insurance begins with a search of public land records affecting the real estate concerned. The examination of
evidence from the search is intended to fully report all “material objections” to the title. This will determine whether or not
the property is insurable.
Frequently, documents that don’t clearly transfer title are found in the history that is assembled from the records in a
search.
Some examples of this are:
- Deeds, wills, trusts that are not properly worded
- Outstanding liens on the property i.e. Mortgages, tax liens, etc
- Pending legal action against the property
- Incorrect or missing notary acknowledgements
| HIDDEN TITLE HAZARDS |
In spite of the expertise and dedication that go into a title search and exam, hidden hazards can emerge after closing,
resulting in unpleasant and costly surprises. Some examples of hazards include:
resulting in unpleasant and costly surprises. Some examples of hazards include:
- A forged signature on the deed, which would mean no transfer of ownership to you
- An unknown heir of a previous owner who is claiming ownership of the property
- Instruments executed under an expired or fabricated power of attorney or trust
- Mistakes in the public record
CONSEQUENTLY, BOTH BUYER AND SELLER SHOULD INSIST ON THE STABILITY AND RELIABILITY THEY RECEIVE THROUGH COVERAGE AT CONVEYANCE TITLE & ESCROW |