Protecting Your Home with Title Insurance
The biggest investment you will make in your life will likely be purchasing a home. So before you sign on the dotted line, you must be certain that the "title" of the property is free of any other claims.
A title insurance company ensures that your new home doesn't carry expensive encumbrances and other legal obstacles.
You pay the title company a single premium which includes the cost of verifying clear title and covers you in case some fault is later discovered in the title.
The title insurance company searches the property's title history. The title insurance company can almost always identify any title problems that may arise and clear up these problems before you close on the property.
Because Real Estate Law is so complex, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem selling your property. Your title insurance owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title insurance company is responsible for. Title insurance covers the following:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. In this case, the title insurance company will defend the title and will cost you nothing.
- Defective title — This is a general term for a legal problem with the title that cannot be corrected and includes "contested title" above. Defects are rare, but they can be very difficult, making the property inaccessible, unable to be built, or unsaleable. Many other complicated problems define "Defective title." The title insurance policy will protect you from these errors if the title company doesn't discover them.
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