FREQUENTLY ASKED QUESTIONS ABOUT TITLE INSURANCE
Saturday, July 04 2009 @ 11:10 AM EDT
Contributed by: Kevin Bradley
Real estate has traditionally been a family's most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one's ownership of real estate and the improvements located on the land. The owner, the owner's family, and the owner's heirs may have rights or claims in and to the property that you are buying.
Those who have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, or various other individuals or corporations. The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may
purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.
Why do you need Title Insurance?
To protect possibly the most important investment you'll ever make - the
investment in your home.
With a title insurance policy, you as owner, have an indemnity contract that will
reimburse you for loss in the event someone asserts a claim against your property that is
covered by the policy.
How can there be a title defect if the title has been searched?
Title insurance is issued after a careful examination of copies of the public
records. But even the most thorough search cannot absolutely assure that no title
hazards are present, despite the knowledge and experience of professional title
examiners. In addition to matters shown by public records, other title problems may
exist that cannot be disclosed in a search.
What protection does title insurance provide against defects and hidden risks?
Title guaranty will pay for defending against any lawsuit attacking your title as
guaranteed, and will either clear up title problems or pay for any losses. For a one-time
premium, an owner's title guaranty policy remains in effect as long as you, or your heirs,
retain an interest in the property.
What title insurance protects against?
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 deed, releases or wills, Instruments executed under invalid or expired power of
· 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
· Liens for unpaid estate, inheritance, income or gift taxes
What this means to you?
The peace of mind in knowing that the investment you've made in your home is
a safe one.
The 21 reasons for Title Insurance
Buying Property Is a Numbers Business
1. A fire destroys only the house and improvements. The ground is left. A defective
title may take away not the only the house but also the land on which it stands.
Title insurance protects you (as specified in the policy) against such loss.
2. A deed or mortgage in the chain of title may be a forgery.
3. A deed or a mortgage may have been signed by a person under age.
4. A deed or a mortgage may have been made by an insane person or one
5. A deed or a mortgage may have been made under a power of attorney after
its termination and would, therefore, be void.
6. A deed or a mortgage may have been made by a person other than the
owner, but with the same name as the owner.
7. The testator of a will might have had a child born after the execution of the will,
a fact that would entitle the child to claim his or her share of the property.
8. A deed or mortgage may have been procured by fraud or duress.
9. Title transferred by an heir may be subject to a federal estate tax lien.
10. An heir or other person presumed dead may appear and recover the property
or an interest therein.
11. A judgement or levy upon which the title is dependent may be void or voidable
on account of some defect in the proceeding.
12. Title insurance covers attorneys’ fees and court costs.
13. Title insurance helps speed negotiations when you’re ready to sell or obtain a
14. By insuring the title, you can eliminate delays and technicalities when passing
your title on to someone else.
15. Title insurance reimburses you for the amount of your covered losses.
16. A deed or mortgage may be voidable because it was signed while the grantor
was in bankruptcy.
17. Each title insurance policy we write is paid up, in full, by the first premium for as
long as you or your heirs own the property.
18. There may be a defect in the recording of a document upon which your title is
19. Claims constantly arise due to marital status and validity of divorces. Only title
insurance protects against claims made by non-existent or divorced "wives" or
20. Many lawyers, in giving an opinion on a title, protect their clients as well as
themselves, by procuring title insurance.
21. Over the last 24 years, claims have risen dramatically.