Buying a home is one of the most significant investments you’ll make in your lifetime. Naturally, you want to ensure that the property you’re purchasing has a clear title — that is, free of any legal issues or disputes that could jeopardize your ownership. This is where title insurance comes into play. 

Title insurance offers protection against potential issues with the title that may arise after the closing of the real estate transaction. However, what happens if such issues do arise despite having title insurance?

Understanding Title Insurance

Before delving into what to do if issues arise after closing, let’s briefly discuss what title insurance is and why it’s essential.

Title insurance is a type of indemnity insurance that protects both homebuyers and lenders against financial loss resulting from defects in a property’s title or ownership rights. These defects could include outstanding liens, unpaid taxes, undisclosed heirs, errors in public records, or even fraud, among others.

There are two main types of title insurance policies: lender’s title insurance, which protects the lender’s investment in the property, and owner’s title insurance, which protects the homeowner’s equity in the property.

What to Do If Issues Arise After Closing

Despite the thoroughness of the title search conducted before closing, issues with the title can still surface after you purchase your home. Here’s what you should do if you encounter such problems:

Review your title insurance policy – Start by reviewing your title insurance policy to understand the coverage and any exclusions. Make sure you understand what types of issues are covered and the steps you need to take to file a claim.

Contact your title insurance company – If you discover a problem with the title, contact your title insurance company as soon as possible. They will guide you through the claims process and advise you on the necessary steps to take.

Provide documentation – Your title insurance company will likely ask you to provide documentation related to the issue, such as the title insurance policy, the sales contract, closing documents, and any other relevant paperwork. Be sure to gather and submit these documents promptly.

Cooperate with the investigation – Once you’ve filed a claim, the title insurance company will initiate an investigation into the issue. Cooperate fully with their investigation, providing any additional information or documentation they request.

Seek legal advice if necessary – In some cases, particularly if the issue is complex or involves legal matters, you may want to seek legal advice from a real estate attorney. They can help you understand your rights and options and represent your interests throughout the claims process.

Follow through – Stay engaged in the process and follow through on any requirements or recommendations from your title insurance company or legal counsel. Prompt action can help expedite the resolution of the issue.

Resolution – Once the investigation is complete, the title insurance company will determine whether the issue is covered under your policy. If it is, they will work to resolve the issue, which may involve paying for legal fees, clearing the title, or compensating you for any losses incurred.

Appeal if necessary – If your claim is denied and you believe it was unjustly rejected, you have the right to appeal the decision. Consult with your title insurance company or attorney to understand the appeals process and your options moving forward.

While title insurance provides valuable protection against unforeseen issues with the title, it’s essential to know what steps to take if problems do arise after closing. Contact Linear Title & Escrow in Virginia Beach, VA to learn more.