With few exceptions, a home represents the largest single investment most
people make in their lifetimes. Thus it is only natural that an owner
will want to make that investment secure by protecting the basic proof
of ownership. Title insurance is the most effective and lowest cost way
of doing just that.
When a person
buys a car or consumer goods, they seldom need to know whether the former
owner is married, single or divorced: whether they have paid their taxes
or are involved in a lawsuit. But when a person buys a home it is necessary
to have all that information and much more. For while he may own the property,
others such as lenders and lien holders, may also have rights in that same
real estate.
Title Insurance
is a contract to protect an owner against losses arising through defects
in the title to real estate owned. If the title is insurable, the company
guarantees the owner against loss due to any defect in title or expenses
in legal defense of the title pursuant to the terms of the policy.
The cost
of title insurance is directly related to the value of the property. The
premium is small compared to the total purchase price. It is paid only
once and remains in force for as long as the property is owned by the
insured and continues to protect the insured on warranties after it is
sold.
The two common
types of Title Insurance Policies are:
- A Lender's
Policy of Insurance - only insures that your Mortgage Lender has a valid,
enforceable lien on the property.
- An Owner's
Policy - Protects you, the Owner, from “defects” that existed
prior to the effective date of your Policy. In the case of a valid claim,
in addition to actual financial loss up to the face amount of your Policy,
your Owner’s Title Policy covers the cost of any legal defense
of your Title.
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