Insuring your most Valuable Asset
WHAT IS TITLE INSURANCE?
Real Estate is typically a family’s most valuable asset and is worth protecting. The potential claims against title are many and varied Those claims may be made by prior owners in the chains of title (or their heirs), governmental bodies, contractors, lenders, judgment creditors, taxing authorities or various other individuals or corporations. Despite the best due diligence, it is possible to own property without having knowledge of these rights and claims. Generally, a person thinks of insurance in terms of the payment of future loss due to the occurrence of some future event (i.e. hazard insurance). Title insurance is unique in that it provides coverage for past events (meaning events that occurred prior to your ownership). The risks are far less obvious than those protected against by hazard insurance, but can be far more devastating.
Title Insurance Explained
Getting Clear Title
It is of utmost importance that you receive clear title to the property you purchase. This begins with a thorough title examination and ends with the issuance of a title insurance policy insuring you against claims that are either not reported or not discover-able.
Protection Against Unreported Title Defects
In order to determine the status of title, our abstractor conducts a detailed examination of the public records associated with the property. Our office then examines those recorded documents in order to determine if there are any rights or claims that may impact your title. The title search may reveal the existence of recorded defects, liens or encumbrances upon the title such as unpaid taxes, unsatisfied mortgages, judgments, tax liens, easements, restrictions and court actions. These recorded defects are resolved or, if this is not possible, they are reported to you prior to your purchase of the property. Title insurance protects you against any loss from recorded defects, liens or encumbrances that are not reported to you and which are within the scope of coverage of the particular policy issued in the transaction.
Protection Against Claims that Could not have been Discovered.
Title to the property that you purchase could be seriously threatened or lost by title hazards which are considered “hidden risks.” “Hidden Risks” are those matters, rights or claims that are not shown by the public records and, therefore, are not discoverable by a search and examination of those public records. Matters such as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the records are examples of “hidden risks” which could provide a basis for a claim after your purchase of the property. Title insurance protects you against these possibilities.
How Title Insurance Claim Works.
If a claim is made against your title, the title insurance company (1) defends your title (this may include filing or defending a legal action); and (2) bears the cost of resolving the issue.
Only one Premium
Unlike other kinds of insurance, the original premium is your only cost. So long as you or your heirs own the property, the title remains insured.