Title Insurance for Your Peace of Mind
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Buying a home will likely be the biggest investment you make in your lifetime. So before you close, you need to know that no one else has a claim to the property.
A title insurance company ensures that your new home doesn't carry encumbrances and other legal obstacles.
You pay the title company a single premium which includes the cost of verifying clear title and covers you in case some fault is later discovered in the title.
The title company performs an extensive search on the title history of the property. The title company can usually find any title problems that may arise and have these problems cleared-up prior to closing.
Real Estate law is extraordinarily complicated. Title companies make sure that all the T's are crossed and all the I's are dotted so you don't end up with a clouded title and legal problems. Your owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title company's responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you in the following cases:
- Contested title — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. In this case, the title company will defend the title at no expense to you.
- Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Many other complex problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company misses them.