Title Insurance protects against losses that occur when the title to a property is not free and clear of defects. This includes liens, encumbrances, or defects that were unknown at the time the title policy was issued. Title insurance also guarantees loan priority. The policy terms specify the risks that are covered and those that are excluded. If a covered loss occurs, the title insurer will compensate you or your lender up to the policy’s face value, including any associated legal costs. Coverage takes effect from the policy’s issue date and applies to defects that existed before you took ownership. Listed below are various reasons to carry title insurance.
- Claims constantly arise due to marital status and the validity of divorces.
- A deed or mortgage in the chain of title may be a forgery.
- A deed or mortgage may have been made by an incompetent or underaged person.
- A deed or mortgage made under an expired power of attorney may be void.
- A deed or mortgage may have been made by a person with the same name as the owner.
- A child born after the execution of a will may have interest in the property.
- Title transferred by an heir may be subject to a federal estate tax lien.
- An heir or other person presumed dead may appear and recover the property or an interest.
- A judgment regarding the title may be voidable because of some defect in the proceeding.
- By insuring the title, you can eliminate delays when passing your title on to someone else.
- Title Insurance reimburses you for the amount of your covered loss.
- Title Insurance helps speed negotiations when you're ready to sell or obtain a loan.
- A deed or mortgage may be voidable if signed while the grantor was in bankruptcy.
- Claims have risen dramatically over the last 30 years.
- There may be a defect in the recording of a document upon which your title is dependent.
- Title Insurance covers attorney fees and court costs.
- Many lawyers protect their clients as well as themselves by procuring title insurance.
- A deed or mortgage may have been procured by fraud or duress.
- A title policy is paid in full by the first premium for as long as you own the property.
The enclosed information is deemed reliable but is not guaranteed.
