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Why Do You Need Title Insurance?
By Matt Unangst, 23 Jan 16:36
• Protects your ownership to the property
• Protects your lender’s investment in your home loan
• A title company will search records for any possible clouds on your title – title companies focus on risk prevention, not reimbursement for damages
• Any problems that arise later will be dealt with by the title company
Buying a home is a huge investment. When buying a home, there are a great number of other costs you will pay besides the cost of the home. One of these is a title insurance premium. It is important to know what services are provided to you for this title insurance payment. Title companies protect your title to your home from any claims or liens of any other individuals or government entities.
Unlike most other kinds of insurance, which exist primarily to pay your costs in the event of a catastrophe or injury, title companies focus their efforts primarily on risk prevention, meaning that you will most likely never face any challenges to your title. The primary element in a title company’s risk prevention efforts is a thorough search of all public records related to the property. A timeline of your property’s ownership is established to determine the rightful owner. Every title company keeps its own database, or “plant,” of all information they have gathered in the past so that they can easily access it for future reference.
Another major difference between title insurance and other types of insurance is payment. Title insurance is paid for with a one-time premium, so you don’t have the monthly payments that come with other kinds of insurance. Your one-time premium even covers any of your heirs should they inherit the property, meaning title insurance is no-maintenance protection, something you can’t get anywhere else.
With title insurance, your rights and interests to the property will be protected from attack by other people. The title company will make sure that the title is correctly transferred to you.
Title companies not only issue policies to buyers, they also issue title policies to lenders. Most lenders will require you to acquire lender’s title insurance before they will issue a loan. A lender’s title insurance policy protects a lender’s investment in your property.
Buying a home is usually one of the biggest steps in a person’s life. Having the ownership to your home challenged can destroy everything you have worked for, but protection exists in the form of title insurance, an essential purchase when buying property.
KEYWORDS: title insurance, title company, real estate, buying a home, escrow
Tags: title insurance