Title Insurance Protects Your Biggest Investment
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Purchasing a home is probably the single biggest investment you will ever make. So before you close, you need to know that nobody else has a claim to the property.
Determining that your rights and interests to the property are clear is the business of a title insurance company.
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 insurance company searches the property's title history. The title company can almost always identify any title problems that may arise and clear up these problems before you close on the property.
Real Estate law is extraordinarily complex. 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 title insurance owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title company is responsible for. Title insurance covers the following:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. 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 complicated problems define "Defective title." The title company will find these title problems, or should they miss them, insure your loss up to the amount of the policy.