What does title insurance do?

When a person purchases property, it may have had numerous previous owners. The land where it is located may have had even more ownership changes. Problems could have occurred in the past during the title transfers of the property or land. Unpaid real estate taxes and other types of monetary issues could be attached to it. Title insurance provides the policyholder with protection against claims and legal fees associated with resolving such issues.

Potential Problems
When any type of property is purchased, it could have many unseen potential problems. During a title search, public records are carefully examined. The history of a property’s ownership transference and any legal issues associated with it are identified. A title research will identify any limitations associated with using the property as well as the rights of any others to the property. It will also reveal any monetary obligations attached to the property and more. 

Public Records
A property may have issues in its past associated with the execution of its deed. If it was done by someone who was not deemed competent or a minor, there is a problem. Title insurance can reveal if there have been any mistakes made in the public records associated with the property as well as the recording of necessary legal documents. There could also be mistakes that involve errors and omissions associated with incorrectly transcribing similar names. Problems could arise from indexing not being done correctly as well as a failure to preserve original documents and more.

If a person needs a mortgage to buy a property, their lender may require them to purchase title insurance for protection equal to the amount of the loan. This coverage will last until the mortgage loan is completely repaid. The person purchasing the property will be required to pay for the title insurance.

Term of Protection
Title insurance provides protection against claims that occur prior to the policy’s date. The coverage it provides extends backward for an indefinite period of time. A property owner won’t need protection for the period of time the property is in their name.

Dates Of Protection
Once a title insurance policy is purchased, it will provide protection to the policyholder against title claims for as long as they own the property or any of their heirs have an interest or obligation regarding it. When the owner sells the property, if the purchaser is buying it with a mortgage, their lender will require them to take out a new title insurance policy.

Selling Property
Having title insurance will not stop a property from being less marketable because of a title claim. When such a claim is made, the property won’t be able to be sold until the title issues are resolved. An owner will want the claim to be settled as soon as possible. This title insurance company will want to pay as little for a settlement as possible. It will often engage in careful negotiations about the situation with the claimant.

Defending Title Claim
A title insurance policyholder is protected should a claim be placed against the ownership rights for their property. Their policy will cover fees and costs associated with protecting their rights against any type of title claim. They will receive reimbursement up to the face amount of the title is loss or costs associated with protecting it.

Should a property owner not have title insurance, they could face paying significant amounts of money for legal fees and other costs associated with trying to keep their property. A title insurance company can provide their policyholders access to experienced legal industry professionals and more. They will be able to provide the best possible result when a claim is made against the title of a property.