Facts About Title Insurance


Securing title insurance ultimately protects you from potential ownership or transfer problems of your property. Land titles allow you to own, control, and dispose of your property legally. All previous owners and transfers are shown in these documents which will allow the current holder to trace previews owners. In some cases, defects occur in the transfer of title, which can lead to the potential loss of your house. A title insurance protects you from this risk.

When is title insurance necessary?

If you need to pay mortgage or have plans for refinancing, then having one is a must. Lenders consider this a prerequisite before considering and approving loans. The insurance will be valid until the entirety of the loan is paid. Note that an owner’s policy for title insurance is different from that of a lender’s. A lender’s policy usually does not equate to the full value of the property while an owner’s policy has provisions indicating full coverage of the value in case of defects.

What is the payment scheme for an Owner’s Policy?

You pay a one-time fee and the title insurance for as long as the owner and the heirs of the property choose to keep it. There are no monthly premiums, unlike other homeowner’s insurance policies. When there is a spotted defect during the title search, a fact-checking process for realtors, owners will then have greater protection against potential losses and an owner’s policy will fully reimburse the owner of their losses.

What common defects are encountered with titles?

Some of the most common conflict related to titles are: unpaid mortgages and taxes, conflict between heirs, omissions in deeds, fraud/forgery. Having an owner’s policy title insurance will mean that the seller will back you up legally in addition to financial coverage.

Do I need to get title insurance for a newly built house?

Although the house itself indicates that you are the first owner, the lot may indicate another thing. A vacant lot will most likely have a previous owner and in order to make sure you are protected from problems such as unpaid subcontractors during the clearing process of the lot, having an Owner’s Policy will be necessary.

If my property’s value increases, does the title insurance follow?

In most cases, no. But, you can increase coverage by paying a minimum fee to your insurance provider. To extend the coverage to changes that may have occurred in the title since the original policy, you would need to apply for a new, separate policy and pay the full rate.

Purchase a title insurance from a licensed provider. Fees may differ from state to state but the amount is far from the actual value of your property. Shop around for insurance title providers and compare fees.

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