4 Things to Know About Title Insurance

What is title insurance, and why should you have it? If you’re new to the home buying experience, “title insurance” is a term you’ll hear at some point during the real estate transaction process. Title insurance is a type of policy that protects against monetary loss due to previously undetected problems or defects on a property that arise after closing. In such a situation, title insurance saves the policyholder from losing money on their investment, time in court and the trouble of having to clear title issues.

What Should You Know About Title Insurance?

Since title insurance is such an important component of buying a home, it’s important to at least have a general idea of the basics surrounding these types of policies. Here are four things to know about title insurance:

1. Lender’s and Owner’s Title Insurance fall under different policies. Lender’s almost always require the home buyer to purchase Lender’s Title Insurance. An Owner’s Policy is not mandatory, but highly recommended.
2. Lender’s Title Insurance protects the mortgage lender’s financial interest in the property. It does not cover losses suffered by the homeowner.
3. Owner’s Title Insurance guards against the homeowner’s real estate investment. It protects against financial loss, covers legal costs of defending title and mitigates the emotional expense of having to contend with title defects, or someone able to lay ownership claim to your property after closing takes place.
4. What does an Owner’s Title Insurance policy protect against? Effective for as long as you own the property, an Owner’s policy safeguards against title defects like:

• Incorrect legal descriptions
• Improperly probated wills
• Unidentified heirs
• False impersonation
• Fraudulent execution of documents
• Incorrect delivery of deeds
• Recording errors or omissions
• Clerical errors
• Forgery

*This is not a comprehensive list of potential title defects. A number of issues can cause title problems. For more on this topic, please visit our Title Insurance page, or contact your title agent, real estate agent or real estate attorney for additional information.

Want to learn more about Title Insurance Policies? Contact the knowledgeable team at Linear Title & Escrow today!