The purchase of real estate is probably the single largest investment you’ll make in your lifetime. Title insurance protects your investment and ensures:
That your rights and interests to the property are protected.
That the transfer of ownership is smoothly completed.
That you receive protection from future claims against the property.
Title Insurance is the most effective, least expensive way to protect your ownership rights. Because land endures over generations, others may develop rights and claims to a particular property even without the owner’s knowledge. The current owner’s rights, which sometimes involve family and heirs, may become clouded. There may be other parties (such as government agencies, public utilities, lenders or private contractors) who also have rights to the property. These interests potentially limit or “cloud” the title of a buyer/owner.
Before your real estate transaction closes, we will perform a comprehensive search of all documents recorded against the property. These records are then examined by an experienced title examiner to determine their impact on the current status of ownership. After examination of title, a title commitment is provided to you and your agent for review. The title commitment sets forth requirements for any documents necessary to clear up issues on title. The title processor and closer then obtain and record the required curative documents prior to closing. This process enables pending title problems to be identified and cleared prior to your purchase or refinance of the property.
Even after the most careful research, some title flaws may go undetected. Among the more common flaws to title are: forgery, invalid court proceedings, mistaken legal interpretations, defective deeds, confusion due to similarity of names, previously unrecognized rights of spouses and undisclosed heirs. These title flaws may surface at any time which is exactly why title insurance is so important.
Protection against title flaws and other claims is provided by the title insurance policy which is issued after your transaction is complete. Two types of title policies that are issued are:
An owner’s title policy which covers the buyer for the full amount paid for the property
A lender’s title policy which covers the lending institution’s investment over the life of the loan.
When the owner’s and lender’s policy are purchased at the same time, a substantial discount applies in conjunction with the simultaneous issue. Lenders almost without exception require the buyer to purchase lender’s title insurance coverage. Unlike other types of insurance, your title insurance policy requires only one moderate premium for a policy which protects you and your heirs for as long as you own the property. There is no renewal premium required.
The title policy covers legal defense of your title for any defect covered under the policy’s terms and also covers reimbursement to you for actual financial losses up to the policy limits.