Q: What is the need
for title insurance?
Title insurance provides protections against such unforeseen elements as
claims against the title of your home that weren't revealed during the
title search. Most title hazards will show up during a title company's
investigation of public records, but even the most exhaustive search may
not bring all problems to light. Title insurance is written to provide
protection against most undisclosed risks. Other factors that are
Easements of record
Restrictions, covenants, and conditions
Verification of legal description
Q. What are some
One example would be a claim by a missing heir or a previous owner. Other
possible claims can include liens by laborers for unpaid work, a deed
conveyed by a married person purporting to be single, boundary disputes,
or forged deeds. When claims are made, the title insurance company is
responsible for satisfying legitimate insured claims or for defending the
interests of the policy holder in court.
Q. Are different kinds
of title policies available?
Yes, and generally there are two forms. The first is lender's title
insurance. It is usually written in the amount of the home loan and
protects the lending institution from losses resulting from defective
titles. Lending institutions often will refuse to make a loan unless a
lender's policy is purchased. Because lender's insurance expires when the
mortgage loan is repaid, it does not protect the home buyer from title
defects. For this, you need a form of title insurance called an owner's
policy. It usually is written in the amount of the real estate purchase
price. Coverage continues as long as a property owner, his heirs, or
persons to whom he may bequeath it, retain an interest in the property.