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Title Insurance: What Is It and Why You Need It

Title insurance can protect owners if there are claims against the owner’s right to the title. Unlike other forms of insurance, it protects the insured against events that will have happened in the past, and in contrast to other forms of insurance, you create just one premium payment for as long as you own.

Title Insurance Protects Your Right of Ownership from loss

Title insurance protects from loss. It protects the title– which is proof of ownership of property, giving its owner the right to use said property however they see fit. The title is transferable, meaning you'll be able to legally transfer ownership of the property to others.

Common Title Defects

A title search can help uncover title defects tied to your property. And, subject to the terms of the policy, your title insurance may provide you with protection from title problems discovered after you close up your transaction. a number of these common title issues are:

  • Public record errors (Mistakes in recording legal documents by municipal or county government)

  • Undisclosed or missing heirs

  • Misinterpretations of wills

  • Deeds by persons of unsound mind, by minors, or by persons supposedly single, but of course married

  • Fraud

  • Liens for unpaid estate, inheritance, income, or gift taxes

  • Forged deed, releases, or wills

Title insurance protects the purchaser of the property from claims arising from any of these events if the event passed off before the property was purchased.

Two kinds of Title Insurance

There are two kinds of title insurance. The lender requires insurance for the quantity of its loan through which the lender maintains a sound enforceable lien on the property. Within the event of an adverse claim, the lender ordinarily wouldn't be anxious unless the loan becomes non-performing and therefore the claim threatened the lender’s ability to foreclose and recover its principal and interest. within the event of such a claim, you, because the owner, haven't any provision for repayment of legal expenses. An owner’s policy, on the opposite hand, offers you that protection. Purchasing your own policy for less than a little expense can bring you peace of mind.

Why do I like Title insurance?

While you're not legally required to possess title insurance after you purchase a property with cash, if you intend to induce a mortgage, most banks require you to own a lender’s policy (loan policy), which protects the lender from any adverse claim against the title. Most lenders require a loan policy once you cast off a loan with them to confirm their interest within the property is protected, as that property acts as collateral to secure repayment. For you to guard your interest within the property, experts highly recommend that you simply obtain an owner’s policy.

Play it safe

These and other issues are often covered by an owner's policy of title insurance. After you buy a home, ensure you're protecting that investment with title insurance.

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Please feel free to call us with any title related questions at (732) 422-3900

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