Title insurance protects the insured party against covered title defects affecting the insured property. When you buy a home, you expect to enjoy important property rights. For example, you likely expect to be able to occupy the property, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell your property or pledge it as security for a loan. Title insurance is designed to protect these important property rights. There are two types of title insurance policies, Owner's Title Insurance Policy that protects you the owner and Lender's Title Insurance Policy which protects the interest of the lender.
Buying a home is a big investment. For a one-time premium, your home is protected against hidden risks or undiscovered interests and defects in title caused by fraud, forgery, incapacity, impersonation or the seller’s lack of authority to sell the property. This premium for an owner’s policy of title insurance is only paid once and covers you for as long as you hold an interest in the title to your home. The coverage automatically continues for the benefit of your heirs as well.
Warranties in your deed may not guarantee your ownership of the home or property. Even if the seller warrants good title to you in the deed, the seller may not have the money to pay your losses if a problem arises. When you purchase an Owner’s Policy of title insurance you have the power to protect yourself and your property against loss from covered claims. The policy may cover more than just ownership. Depending on the type of policy issued, coverage insuring against loss due to disputes over boundaries, access rights and easements may be provided to you. Ask about available options for extended or expanded coverage.
A lender’s title policy does not cover you. Your lender has required you to pay for a lender’s policy of title insurance, but that policy only provides insurance to the lender. You the homeowner are not covered, and cannot make a claim, under a lender’s policy of title insurance.
The high cost of claims and title disputes are not cheap. Are you prepared to pay a lawyer to fight for you in court? Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle an adverse claim. You’ve worked hard for your home. Protect your important property rights by obtaining an Owner’s Policy of title insurance.