A Guide to Title Insurance
Finally, after years of earning and saving money, you are the proud owner of a home. Negotiating with the seller was a piece of cake. Everything is perfect, you tell yourself during the housewarming party you throw. Then a short order appears asking you to vacate the property, turning the dream into a nightmare. Turns out his new house is involved in an old legal case.
Many property owners end up in such unforeseen legal battles because they were unaware of title insurance or chose to ignore it.
What is title insurance?
It is homeowner’s insurance coverage for losses sustained due to title defects, including outstanding property taxes from previous owners, falsified or invalid property titles, lack of access to the property, heirs who have a valid claim to the property but have not come forward, and other factors that come to light after the property has been purchased.
Since properties change hands quickly, buyers tend to overlook crucial details. This can lead to problems later, such as court settlements, legal fees, and in some cases, loss of property. Taking this type of insurance will help you avoid these types of problems.
The Process of Obtaining Title Insurance
When taking out title insurance on a property, a title search is conducted prior to purchase. An experienced property attorney or title insurance company representative usually conducts the search. They perform extensive checks of documents filed with the local land records office, to ensure the property has no existing title defects such as liens, property taxes, outstanding mortgage, defects from previous property transactions, and other issues that threaten the property of the insured.
If the property passes this check, the insurance is awarded and the property can then be purchased. The responsibility for having conducted a thorough search of the property now rests with the insurance company. Once the insurance is granted, any loss incurred defending the title will be taken care of by the firm. The insurer will not only cover her legal fees, but will also reimburse her for the amount she invested in the property if it is repossessed.
Choosing the right insurance company
Insurance rates vary from company to company. Shop around and compare the different policies on offer to get the best deals on your property.
When selecting a company, be sure to start by talking to a few of their customers. Do your homework. Gather information about the policies that are offered. Some companies offer discounts in certain cases. Find out if you are eligible for them. Information on how the company resolves your title disputes and their success rate will help you make up your mind.
Another thing to do when shopping for this type of insurance is to make sure you understand what the policy offers. If you are not familiar with the legal aspect of the process, it is recommended that a trusted lawyer verify the document before signing it.
With property scams on the rise by the day, title insurance on your property will give you peace of mind. Plus, if title is ever contested, having secure title won’t leave you struggling in court.