How Could Title Insurance Protect You?
When you buy a house, we think of common types of insurance to protect our investment.
Most likely, you will get Homeowners Insurance which covers the physical structure of the house, the contents and/or personal items plus some personal liabilities.
You could also go for insurance to protect our houses from natural disasters like flood insurance. Let’s add in Auto Insurance so everything is covered.
That’s what most homeowners think, right? Having the insurances mentioned makes a homeowner think that his or her investment will be taken care of in case something happens. But, here’s one type of insurance that’s not too popular, but can save a homeowner thousands: Title Insurance.
What is Title Insurance?
Title insurance is a kind of insurance that protects you against loss in case problems arise with the title of the property you just purchased. This can include invalidity or unenforceability of mortgage loans. It may also protect the homeowner against lawsuits directed to the title. Title insurance is also known as title policy.
To put it simply, it’s not the actual physical structure that you are protecting, but, your right to own, occupy, remodel, rent out and, eventually, sell the property.
Two Types of Title Insurance
Title Insurance for the Lender
This is needed in order for your lender’s investment to be protected. This type of title insurance covers the amount of the mortgage.
Title Insurance for the Owner
This type of title insurance is for the homeowner. This is the type that protects that owner’s rights to the property.
Benefits of Title Insurance
So what exactly are the benefits of getting title insurance? And, is it really worth getting one? The following benefits may answer these questions:
One-Time Premium
There are no monthly payments when you get title insurance. You only have to pay once. The great thing is, the coverage doesn’t just stop with you because your heirs will also be covered by the insurance as long as they are interested in the property.
Protection
That’s the bottom line with whatever type of insurance you get. It’s basically for protection. More specifically, title insurance can protect you from situations like:
• Deed errors
• Omitted details from the deed
• Mistakes in examining records
• Forgery
• Undisclosed heirs
Prevents Financial Loss
Aside from protecting your rights as the owner of a property, having title insurance also prevents financial loss. If a problem on the title does arise, legal fees as well as other fees needed to investigate and sort out the problem could pile up. If you have title insurance, you don’t have to worry about the fees needed to iron out the problem on the title.
Extra Coverage
There are title insurances that have extended coverage. What this extended protection covers varies from one company to the next. It could include protection from:
• Encroachment
• Incorrect surveying
• Silent liens
• Post-policy forgery
• Pre-existing violations of subdivision laws
Peace of Mind
Having this kind of insurance just makes you sleep better at night. No matter what error was found during the title search, you’ll be able to resolve it head first with confidence because you know that you’re covered and your insurance company will take care of it.
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