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Title Insurance and three definitions to help make it clear as to what it is and it’s sole function.
Title companies spend the majority of their operating income collecting, storing and analyzing official records for information that affects title to real property. The experts within a title company are trained to identify the rights of others in your property, such as recorded liens, legal actions, disputed interests, rights of way, and other encumbrances on your title.
The best way to explain title insurance is to answer commonly asked questions on the topic.
Many people think that since it’s protecting against events in the past, title insurance is something they can choose to go without.
It’s a common misconception that a title search will uncover every possible defect in title. Title searches only discover events and documents of public record, so anything done illegally or without proper documentation may not be known until some time in the future.
Lenders do not consider title insurance optional. In fact, nearly all institutional lenders insist on having their own policy separate from the owner’s policy. If it’s important for their partial investment in the property, it is even more important for the homeowner to be protected for the full value of the home.
Title insurance protects you against events that occurred before the policy was purchased as long as the title defect was not discovered at the time of the title search. This differ from property, casualty, life and health insurance policies which protect you against events that occur after you purchase the policy.
There are potentially hundreds of ways title to your property can be compromised. Even if you don’t lose your property altogether, certain title defects can make it impossible for you to sell or even give away your property. Here are some of the possible title defects covered by title insurance:
Hopefully this was enough to grasp an understand of title insurance and why you should have it every time. Consult a local title representative to determine the type and cost of coverage available in your area.
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