Section 1 – Title Insurance protects the property owner from loss.
There are a lot of people who take risks, like buying a house, but don’t want to consider title insurance. They think that if their home is insured, there’s nothing they can do about it. This may be true for the most part, but you still want to make sure that your home is protected from unexpected losses not covered by your standard homeowners policy. For example, what if your neighbor finds out that you have an unsecured loan on your property? Your neighbors could come after you for the loan and also claim that they own the property now because it has no secured mortgage. The title will show them as owners whether or not this is their intention at all.
A good title insurance policy should have coverage much like liability insurance – it protects you and your family against unexpected financial incidents and claims not covered by other policies such as car damage or death of an owner on his policy.
Sub-section 1 – Title protects against claims that someone else has a legal right to ownership of your property.
This is the most common use of title insurance. For some reason-a deed isn’t recorded, a will wasn’t executed properly, or an heir to a property can’t be found-the person who holds title to a property isn’t necessarily the real owner. Title insurance protects you from being forced to give up your home if someone else comes along and claims they own it.
For example, if you buy a home and later discover that the previous owner was mentally incompetent when he signed the deed, you might have to turn over the house and your investment in it to his relatives. If you had title insurance, however, the insurer would pay any costs incurred in defending your claim that you own the property. In addition, if all your legal arguments failed, it would pay you for any losses suffered as a result of having to give up your home
Sub-section 2 – Title protects against undisclosed liens and encumbrances, which could come with unpleasant surprises like increased tax burdens.
Title insurance provides two important benefits to home-owners. One, it protects your property from the negative impacts of these liens. Second, if you have title insurance, you can get your taxes lowered because they won’t be affected by the unrecorded lien.
Many people may not realize that Title Insurance can protect against these types of liens. So let’s explore some of the reasons why Title Insurance is so crucial to your property and how it differs from other types of policies included in this blog.
Sub-section 3 – Title protects against claims that you are trespassing on land owned by someone else.
You know that you own the land that your house is on. You bought it. You paid for it and it’s yours.
But what if a neighbor claims that he owns part of your property? What if he says that you are trespassing on his land?
The only way to prove that the land actually belongs to you is through papers called deeds. Deeds list everyone who has owned the property over time, along with a description of where their property was, and where the boundaries were.
These days, most people don’t really understand what those descriptions are saying because they are written in language from hundreds of years ago when people used different words. In fact, sometimes even lawyers don’t understand them!
So how do you know where your property begins and ends? How do you know if someone else is claiming your land as theirs? How can you be sure no one else has legal rights to use your land or build on it?