What is Title Insurance For?

What is Title Insurance For?

Why do I Need Title Insurance?

To some degree most of us have at least a basic understanding why we own and keep insurance on our auto, life and home.

When it comes to Title Insurance which might be the most important of types of insurance we will buy we tend to know very little. This is likely because most of us will only ever encounter it two or three times in our lives when we buy our dream home.

Title insurance is quite possible one of the least understood types of insurance. The simple truth is because when you purchase your dream home you aren’t actually buying a lovely 3 bedroom Ranch or Victorian style home on a cul-de-sac in a quiet Raleigh neighborhood.  You get those in addition to the legal rights occupy and use the space or in other words the Title or Deed.

Tiles may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and income cases could even cause financial loss to the buyers. Title insurance protects against these types of title hazards where other types of insurance that protect your home focus on possible future events and charge an annual premium.

HOME BUYER TIP:   Lenders Title Insurance although required by your lender as a condition of your mortgage loan approval will NOT Insure you as the Buyer.

Home Buyers should insist on a Simultaneous Owners Title Insurance Policy which costs a mere fraction of pennies per thousand dollars of insurance when compared to the average cost of a home.

Dollar for Dollar Title Insurance is one of the least expensive and most important types of insurance you will ever buy! Ricardo Cobos – Mortgage Lender

What does Title Insurance  Do for Me?

Title insurance protects against loss from hazards and defects that may already exist in the title and is purchased with a one-time premium. As a Buyer or Seller goes through the process of settling a Real Estate transaction, one of the most important protections they can have is Title Insurance, although it is seldom in the thought of, a Real Estate Professional often ensures it is included through the Escrow Settlement process.

Title Insurance Tells a Story of the Life of the Property

Title Insurance discloses the recorded documents that affect the subject property. For example, there may be underground utilities that cannot be seen in a visual inspection, or a neighbor has an easement [right to use a portion of the property] , or maybe there are Confined Certified Restrictions (CCR’s) or other Restrictions that limit the Purchaser’s right to use the property.

Think of it this way…. The property you buy is a pie. Once you close the deal, you own the pie, but others may have the right to use a slice of your pie.  Title Insurance discloses what affects your Pie and protects you against financial losses should losses occur because they weren’t disclosed to you.

Title Insurance Underwriters

Like other types of insurance,  Title Insurance Policies are underwritten by state regulated carriers and their fees often are regulated by state insurance commissioners therefore rates for title insurance premiums within any given state will be the same from one title insurance company to the next.

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