Title insurance protects buyers from any issues, such as damages or financial losses of a property. If the previous owners make false claims, this can save you from damages. Title companies ensure that the seller can legally relinquish the property to you. Discuss with your lender what needs to be addressed to ensure that the property will become yours. The title insurance will cover any losses that might occur depending on the loss.
Possible examples of defects that Title Insurance can cover:
- Forgeries and Fraud
- Lawsuits, Unpaid taxes, and liens
- Undisclosed information
- Mistakes in documents
- Illegal records
- Recorded unpaid liens
What does the title insurance Cover?
Owner’s Title Insurance
Owner’s title insurance covers buyers from any claims before the purchase of the property. Some common risks are:
- Fraud and forgery
- Undisclosed agreements that cause the property to be of lesser value
- Mistakes in disclosures and documents
Lender’s Title Insurance
Borrowing money from a lender would require purchasing a loan policy, which protects only the lender if there is a defect in the title. It does not protect your investment. Some examples of defects are:
- Tax liens
- Debt claims
- The recorded debt against a property
What are the differences between Title Insurance and Homeowners insurance?
Title insurance protects from defects for losses. It’s a one-time payment during escrow to title insurance that looks for any claims, liens, and other possible flaws. Homeowner insurance covers damages such as fire, earthquake, theft or vandalism, or any other natural disaster due to the weather, depending on your insurance policy. Payments are made annually for homeowner insurance.
What Title Insurance should I pick?
Know what you’re getting yourself into, compare rates, and see what services they offer before choosing your top pick. Some title insurance may offer a discount if you meet specific criteria and requirements. Here are some options: