What is title insurance for? - Posted by marcus

Posted by Redline on November 05, 1999 at 13:17:48:

Title insurance is issued by a title company after they complete a title search. They bascially document the chain of title and give you a list of what you’re insured against and what you’re not.

It’s like any other insurance policy: It gives you piece of mind. You know the title your purchasing is clean and without defect. Or if it has any problems, you’ll be made aware of them.

Title insurance is strongly suggested for obvious reasons. It protects your investment against outside claims, etc.

RL

What is title insurance for? - Posted by marcus

Posted by marcus on November 05, 1999 at 12:23:33:

I just wanted to ask what title insurance was for, what it covered, if it is needed and why, who issues it or who I could go to to find out the info. I greatly appreciate any input that the board can give. Thank you!

Title insurance protects your investment - Posted by Dave T

Posted by Dave T on November 05, 1999 at 19:03:31:

As Redline mentioned in his post, title insurance is issued by a title company after they complete a title search. They document the chain of title and note any encumbrances against the property.

Title insurance comes in two flavors – lender’s title insurance and owner’s title insurance. The lender will require title insurance to protect the loan they are making to you. If there is an undetected defect in the title and a successful claim is made, the property can no longer be used to secure the loan made to you. The lender will remove their lien and file a claim against the lender’s title insurance policy to pay off the mortgage balance.

With lender’s title insurance, your lender is protected from a loss from a successful claim to the title. You, however, have no protection against the loss of your property (and your equity) unless you have owwner’s title insurance. With owner’s title insurance, your title insurance company will defend your interest in the property against a claimant and take whatever steps are required to correct the title and to protect you from loss or damage resulting from a claimant’s action.

Bottom line, I suggest that you always purchase owner’s title insurance for any property you acquire. Hope this helped.

Re: What is title insurance for? - Posted by Rob FL

Posted by Rob FL on November 05, 1999 at 14:40:06:

Title insurance is an insurance policy that protects you from problems with the title to a piece of real estate. Generally 4 things are covered:

  1. That the owner who is selling the property to you does in fact own the property and nobody else has a claim against its ownership.

  2. That there are no outstanding liens against the proeprty (other than those listed on the policy) like back taxes, federal tax liens, mortgages, judgments, etc.

  3. That nobody else has a right to use all or a portion of the property. Like a lease, a utility or roadway easement, a fence encroachment, etc.

  4. That the property has legal access to a public road.

Other things are also covered, but that is a good summary.