What exactly is title insurance and why do we need it?

Definition of Title Insurance: Contract to compensate insured party against losses arising from defects in title.

Why: Transfer of a property must be dealt with correctly due to the enormous financial undertaking by the buyer, seller and lender. The insurance will protect buyer from any losses and Buyer MUST be assured that they have marketable title when they go to sell. With title insurance the Statute of Limitation does not apply, it pays for all legal fees if needed, and guarantees no financial loss will be suffered by homeowners.

Some Issues Title Insurance Can Protect Against:

• Forgery
• Incompetency
• Minority
• Faulty Disclosure of Marital Status
• Mistakes in Public Records
• Unknown Heirs

Cost: Title Insurance is paid by a one time premium based on the purchase price of the property.

As you can see, this is a very important part of the buying process and a tool that should not be overlooked. When you get your title commitments, please be sure to take the time and review the documents.

I hope that this article was helpful to everyone and I would like to thank my friends at LandAmerica Lawyers Title with the above information.

Have a profitable day!