Why do I need title insurance?
Title Insurance = Peace of Mind
Buying a home will likely be the largest investment you make in your life. Before you close, you will want to know that no individual or entity has a claim or lien to the property.
A title insurance company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job of a title company.
For a modest, one-time title insurance premium, you will receive continuous title insurance protection equal to the purchase price of the property or its current market value.
The title company searches the title history of the property. Through its research, the title company can almost always find any title problems and have these problems cleared-up before you close on the property.
Real Estate law is extraordinarily complicated. Title companies make sure that all the T’s are crossed and all the I’s are dotted so you don’t end up with a clouded title and legal problems. Your title insurance owner’s policy will describe the property and outline any recorded limitations on your ownership. It will also cover what the title insurance company is responsible for. Typically your title insurance will protect you in the following cases:
Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. If this happens, the title company will defend your title and will cost you nothing.
Defective title — “Defective title” covers any number of problems with the title to your home. It can even include a “contested title”. Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Any number of other complex problems define “Defective title” or “Clouded Title.” The title insurance company will find these problems, or should they miss them, protect you from financial loss – up to the amount of the policy.