Resources: Why Title Insurance

If a claim is made against your insured title, your underwriter protects you by: 

1. Defending your title in court if necessary at no cost to you.
2. Bearing the cost of settling the case if it proves valid in order to protect your title and maintain the possession of your property.

A title insurance gives you assurance that possible clouds on the title to the property you are buying, which can be discovered from the public records, have been called to your attention and that such defects can be corrected before your purchase. Additionally, it a guarantee that if any undiscovered claims covered by your policy arise that will threaten your ownership of the property, it will be disposed of, or you will be reimbursed as your title insurance policy provides.

Unlike other forms of insurance, the original premium you have to pay as long as you or your heirs own the property. This mean that there are no annual payments to keep your Owner’s Title Insurance Policy in force.

With a title insurance policy, you, as owner, have an indemnity contract that will reimburse you for your loss if someone asserts a claim against your property that is covered by the policy.

A title insurance is issued after a thorough examination of copies of the public records. However, even the most meticulous search cannot assure that zero title hazards present despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems that cannot be disclosed in a search may exist.

Here are just a few of the most common hidden risks that can cause a loss of title or create an encumbrance on title:

• False impersonation of the true owner of the property;
• Forged deeds, releases, or wills;
• Instruments executed under invalid or expired power of attorney;
• Undisclosed or missing heirs;
• Mistakes in recording legal documents;
• Misinterpretations of wills;
• Deeds by persons of unsound mind;
• Deeds by minors;
• Deeds by persons supposedly single, but in fact married;
• Fraud; and
• Liens for unpaid estate, inheritance, income, or gift taxes

Title insurance will pay for the defense against any lawsuit attacking your title and will either clear up title problems or pay your losses. For a one-time premium, your title insurance policy remains in effect as long as you or your heirs own an interest in the property.

This gives you peace of mind, knowing that the investment you’ve made in your home is a safe one.