Title Insurance is a form of insurance that insures against losses and the cost of defending your interest in a property should a problem arise during the ownership period. There are several good reasons for purchasing title insurance.
The primary reason is to protect yourself against losses from defects in the title. A title may contain incorrect information about the ownership, incorrect facts about the location of the property, actual property restrictions that are not recorded, problems with recorded encumbrances, with the use restrictions, or previous procedures or judgment claims that were not satisfied.
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There Are Three Types of Problems That Can Arise with a Title
The first involves possible incorrect information on the recorded paper itself. Some defects arise from clerical or recording errors. For example, two different papers recording the same buyer may be in the records under different names for the same seller. And it is possible that someone with a document certifying that they own a piece of property can sell that property without the right to do so. This happens especially when someone with a copy of the original title document is unable to locate the one and only original. Should anyone else use the same title, the second document will be the original in the eyes of the law.
The second can be problems with the written facts contained on the title. The information may be incorrect as to who actually owns a property or what is wrong with encumbrances such as mortgages or notes. A problem with the written facts can also arise simply from the fact that they were incorrect and never changed.
The third are problems that occur in the facts of the location of the property. GPS (Global Positioning Systems) accuracy is only as good as a person’s precision when inputting the property location. Or someone may be confused about the facts of the property line’s location.
The information in a title only describes errors associated with the data recorded on the paper that are due to clerical problems, recording problems, incorrect information contained in the documents, or mistakes made by someone else. They do not provide protection against this type of mistake.
Title Insurance Protects You Against Losses from Title Problems
Title insurance protects against losses from some of those errors. If any of the three occur (incorrect facts, incorrect information about previous transactions and incorrect facts about the location) and the person who would otherwise have to compensate you does not have sufficient funds, a settlement is partly or fully provided by the insurance company. A settlement also occurs if the person who would otherwise have to compensate for damages to your property or bring it to a standard condition does not do so.
The type of protection offered by title insurance depends on the coverage available in your state and on the type of insurance you choose. It can also differ in terms of the carrier you choose and the premiums you pay for the coverage.
Conclusion:
When you consider buying title insurance, you must have a title insurance expert on your side so that you can get the coverage that you need. A title insurance expert with their knowledge and understanding of title insurance will be able to guide you through the steps necessary to get the title insurance you need, at a reasonable price.
