Title Insurance Information
What is Title Insurance?
A title insurance policy protects against losses that occur when you discover after closing that someone else can claim a lien interest or ownership of the property. Could that happen? Yes. Fraud, forgery or simply errors during your title examination or a search that came before it could result in an unclear title coming to light after the closing.
What is a Title Examination or Title Search?
It's a close examination of all public records that involve title to the real estate you are purchasing. The person conducting the search looks at past deeds, wills, and trusts to make sure the "chain of title" has passed correctly to each new owner. The examiner also tries to verify that all prior mortgages, judgments, and other liens have been paid in full. This report is examined and ultimately used as the basis for issuance of the title insurance policies.
What if there is a problem with the title?
If a problem is found it should be corrected prior to closing. For instance, a previous owner sold the property many years ago without properly executing the deed. The defect in execution could result in a "cloud" or problem that must be removed to clear the title.
A title search should uncover other potential problems, such as rights of way, easements, claims of heirs, and pending actions.
Why do I need Title Insurance?
Because the process in documenting filings at public offices, searching those filings, and reviewing for legal significance is not perfect. I The best way to ensure your protection against any imperfection or error has resulted is to obtain a title policy.
What does the Title Insurance Policy cover?
- Problems that did not show up during the title search or were missed by the examiner.
- Errors in public records.
- The policy will pay your legal fees if you must go to court to defend your deed.
- If you lose the property the insurance will pay you for the loss.
What is not covered by a Title Insurance Policy?
- A title insurance policy does not cover defects that occur after you purchase the property.