Protecting Your Home with Title Insurance

Purchasing a home is likely the single biggest investment you will make in your lifetime. So before you close, you need to be sure that that nobody else has a claim to the property.

A title insurance company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job of a title company.

For a modest, one-time title insurance premium, you will receive continuous title insurance protection equal to the purchase price of the property or its current market value.

The title insurance company searches the property's title history. The title company can almost always find any title problems that may arise and clear up these problems before you close on the property.

Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem with the title to your property. Your title insurance owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title insurance company is responsible for. Typically your title insurance will protect you in the following cases:

• Contested title — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. If this happens, the title company will defend the title and will cost you nothing.
• Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Defects are rare, but they can be very difficult, making the property inaccessible, unable to be built, or unsaleable. Many other complicated problems define "Defective title" or "Clouded Title." The title company will uncover these problems, or should they miss them, insure your loss up to the amount of the policy.