| Why Title
Insurance? Owning real estate is one of the
most precious values of freedom in this country. You want the assurance that the property
you are buying will be yours. Other than your mortgage holder, no one else should have any
claims or restrictions against your home.
Title insurance eliminates any risks and losses caused by
faults in title from an event that occurred before you owned the property.
How does
title insurance differ from other types of insurance?
What is a Lender's Policy?
What is a Homeowner's Policy?
What does a Homeowner's Policy provide?
What "hidden risks" are protected under a Title
Policy?
How long does my coverage last?
How do I obtain title insurance and what does it cost?
How does title insurance differ from other
types of insurance?
Title insurance is different from other types of insurance in that it
protects you, the insured, from a loss that may occur from matters or faults from the
past. Other types of insurance such as auto, life or health cover you against losses that
may occur in the future. Title insurance does not protect against any future faults.
Another difference is that you pay a one-time premium. A
title insurance policy will protect you from risks or undiscovered interests.
There are two principal forms of title insurance:
1. The lender's policy
2. The homeowner's policy
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What is a Lender's Policy?
A lender's policy protects the mortgage holder. If there is a fault in title
that results in a loss, the mortgage holder will be paid back.
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What is a Homeowner's Policy?
A homeowner's policy protects you, the purchaser, against a loss that may
occur from a fault in your ownership or interest you have in the property. Protect the
equity in your new home with a title policy.
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What does a Homeowner's Policy provide?
- Protection from financial loss due to demands that may be
charged against the title to your home, up to the cost of the title policy.
- Payment of legal costs if the title insurer has to defend
your title against a covered claim.
- Payment of successful claims against the title to your home
covered by the policy, up to the cost of the policy.
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What "hidden
risks" are protected under a Title Policy?
- False impersonation of the true owner of the property by the
seller or other persons previously in title
- Forged deeds, releases and other documents
- Deeds by persons of unsound mind
- Invalid documents completed by an expired attorney
- Invalid deeds delivered after the death of the grantor
- Deeds by supposedly single persons but actually married
- Claims for unpaid estate inheritance and gift taxes against
prior owners of your home
- Unrecorded easements & ; giving one party the right to
enter another party's property
- Undisclosed descendents of former owners of your home or the
land on which it is situated
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How long does my coverage last?
Once purchased, title insurance remains in effect for as long as you own
your property. Title insurance adds security and peace of mind to homeownership.
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How do I obtain title insurance and what
does it cost?
Let the title company, attorney or agent handling the closing of your
property know that you want to purchase an Owner's Title Insurance Policy. When choosing a
title insurer, you should look for a company with experience, as well as the financial
strength to protect you.
In most states, the insurance commission or some other
governmental body controls the premiums for title insurance policies. You only pay the
premium once. The cost depends upon the purchase price of the property, and your policy
amount must be equal to the purchase price.
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