What Does Title Insurance Protect Me From?

Whenever you buy a home/property, you expect to also enjoy some benefits from that ownership. For instance, you expect to be able to actually occupy & use the property as you like, and to be free from debts/obligations that are not created/agreed to by you. You also want to be able to pledge or freely sell your property as a security for any loan, if required. A title insurance is specifically-designed to cover all these rights that you bargain for.

How it Works

When title insurance is included in the purchase of a property, your title insurer becomes accountable for all the legal expenses incurred to defend the property title, in the event that someone challenges it. There are a number of situations in which you might require title insurance and the company that is responsible for it then takes on all the legal expenses to effectively defend that property. The condition being that you must own an interest in that property. In the event that the defense is unsuccessful, you are reimbursed for any value-loss of that property.

What is Covered?

Title insurance is also referred to as an Owner’s Policy. Generally, it is issued in the actual amount of the real-estate purchase. You pay a one-time fee at the time of closing & it is valid for the entire time that you/your heirs have an interest in that property. Only this kind of an owner’s policy provides full protection to the buyer in case any problem arises in the title. Title Insurance generally covers:

  • Forged deeds, undisclosed heirs, wills, mortgages, releases & other documents

  • Deeds by minors

  • False imprisonment of that land owner

  • Documents that are executed by any revokes/expired power of attorney

  • Fraud

  • Probate matters

  • Deeds & wills by a person who is of unsound mind

  • Rights of any divorced parties

  • Conveyances by any undisclosed divorced spouses

  • Adverse possession

  • Forfeitures of the property on account of criminal acts

  • Defective acknowledgments because of improper/expired notarization

  • Tax record errors

  • Mistakes & omissions that result in improper abstracting

Though these are the general things that are covered, certain coverage might not be available in a specific area/transaction on account of regulatory/legal/underwriting considerations. For more information about title insurance and how it works, speak with experts at ResMac Home Loans.