What Is Title Insurance?
Protecting your Investment!
A home is a large investment, possibly the largest you will make in your lifetime.
When you purchase a home, you purchase several types of insurance coverage to protect your home and personal property.
Title insurance is not as well understood as other types of home insurance, but it is just as important. You are paying to purchase the title to the property - the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property. If these rights are not guaranteed, enormous financial loss could ensue.
Other types of insurance that protect your home concern possible future events and charge an annual premium. Title insurance, conversely, protects against loss from hazards and defects that already exist in the title and is purchased with a one-time premium.
Title Insurance Will Benefit You in Two Ways.
There are two basic kinds of real estate title insurance that can be purchased.
� Lender coverage
� Owner's coverage
Most lenders require mortgagee title insurance as security for their investment in real estate. It enables lenders to make purchase money available, particularly in areas where they know little about the market. Owner's title insurance lasts as long as you have a financial interest in the insured property.
What Does Your Premium Actually Pay For?
An important part of title insurance is its emphasis on risk elimination before insuring. This gives you the best possible chance for avoiding title claims and loss. Title insuring begins with a search of public records. An examination is conducted by a title company to determine whether the property is insurable. The examination of evidence from a search is intended to fully report all "material objections" to the title. Frequently, documents that don't clearly transfer title are found in the "title chain," or history, that is assembled from the records in a search.
Here are some examples of documents that can present concerns:
� Deeds, wills and trusts that contain improper wording or incorrect names
� Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
� Easements that allow construction of a road or utility line
� Pending legal action against the property that could affect a purchaser; � Incorrect notary acknowledgements.
Through the search and the examination, title problems are disclosed so they can be corrected whenever possible. However, even the most careful preventative work cannot locate all hidden title hazards.
Hidden Title Hazards - Your Last Defense.
In spite of all the expertise and dedication that go into a title search and examination, hidden hazards can emerge after closing, resulting in unpleasant and costly surprises. Some examples of hazards include:
� A forged signature on the deed, which would mean no transfer of ownership to you
� An unknown heir of a previous owner who is claiming ownership of the property
� Instruments executed under an expired or a fabricated power of attorney
� Mistakes in the public records.
Title insurance offers financial protection against these and other covered title hazards. The title insurer will pay for defending against an attack on title as insured, and will either perfect the title or pay valid claims.
For any other questions about Title Insurance, please cont Moritz Title at 720.974.4834 or visit them at www.moritztitle.com