We find many buyers and sellers do not know why Title Insurance is needed and what it actually is. Below is a simple definition of the value of Title Insurance.
An Owner’s Policy of Title Insurance protects the property owner against any claims that may challenge the ownership. A Lender’s Policy of Title Insurance protects the Lender’s interest in the property should their lien rights be challenged. If unknown defects should come to light, the policy holder is protected against issues that may result in a loss being incurred. This coverage is provided for a one-time fee that is based upon the dollar value of the coverage being provided.
Unlike other forms of insurance, Title Insurance emphasizes RISK PREVENTION rather than RISK ASSUMPTION. To prevent or minimize the risk, a title search is performed by researching the public records available to determine if defects exist on the property. Some of the defects that could be uncovered are access issues, errors in legal descriptions, unreleased mortgages, missing deeds in the chain of title, tax liens, and judgments. The commitment that is produced following this search will identify said risks and determine the steps necessary to correct or remove them prior to or at closing.
After closing, you will receive your Title Insurance Policy which should be kept for future use by you. Should you sell or refinance your property, the policy may be used by us to save you money towards the cost of a new policy. Be sure to contact Access Title Agency for any future transaction to ensure that you will receive credit.
Note: No legal advice or suggestions are being given.
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