Other Important FAQs
What is Title Insurance?
It’s protection against defects which affect the title to your home or business.
Occasionally a hidden defect in the title or a mistake in a prior Deed, will or Mortgage may give someone else a legal claim against your property.
Why is Title Insurance Important?
Because it protects the INVESTMENT you’ve made in your home or business. If a claim is made against your property, title insurance can save you TIME and MONEY.
Who Is Covered by Title Insurance?
(The Lender) When you borrow money to buy property, you are typically required to buy title insurance to cover the outstanding balance on the mortgage for. But the lender’s title policy does not protect you.
(The Buyer) It’s a good idea to get your own title insurance policy for protection in case there’s a claim against your home. Then your investment is safe, too.
What Risks Are Covered?
The policy is underwritten to include or exclude specific risks, depending on the circumstances. But generally the title policy covers 4 “Hidden Risks”:
1. Errors in public records: Incorrect information in deeds and mortgage regarding names, signatures or legal descriptions.
2. Judgements, Liens and Mortgages: Claims against the property or the seller which become the new owners responsibility after closing, such as unpaid taxes, assessments, and other debts to creditors.
3. Claims To Ownership: By the spouse or a former owner or by “the missing Heir” or a deceased owner who did not receive his share of the estate.
4. Invalid Deeds: Transfers by previous sellers who did not actually own the property, or by previous owners who were minors or not mentally competent.
Many of these problems might not be discovered in a routine search of the Public Records.