What is Title Insurance?

When you buy a car, new or used, the title is signed over to you as the new owner.  Similarly, a home title conveys the chain of ownership for a home.  Title insurance can be purchased to protect you against the loss of your title due to fraud, unrepresented or lost heirs.  There are multiple situations that threaten loss of title:

• Fraud – an individual has stolen the identity of the true seller or created false documents showing ownership.
• Mechanic’s Lien – If a previous owner hired a contractor and did not pay the bill, the contractor can file a mechanic’s lien on the property and demand payment.
• Multiple Heirs – When a family member passes and leaves ownership to multiple people, there is a possibility one heir may try to sell without permission from the others.

How does Title Insurance help?

Title insurance helps limit the financial loss resulting from problems with your title.  If an ownership dilemma arises after you settle on the property, title insurance will help you defend what is yours and support you against any valid claims against your title.  You will be appointed an attorney to fight for your ownership rights.  However, if the case does not end in your favor, you will be given funds to replace your loss of investment on that property.

Your policy is valid for as long as you or your heirs have ownership rights to the property. The policy is usually paid at settlement by the buyer, however it can be negotiated for the seller to pay some or all of the expense.

Lenders Title Insurance is a required fee that falls upon the responsibility of the buyer.   The policy covers the loan amount issued by the lender and protects the lender’s interest in your property from any defects to the title or unforeseen issues.  This policy should not be mistaken as the owner’s policy, as it protects the lender’s interest only.