Title Insurance for Your Peace of Mind
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Purchasing a home is probably the single largest investment you will make in your lifetime. So before you close, you need to be sure that that nobody else has a claim to the property.
A title company ensures that your new property won't surprise you with expensive encumbrances and other legal obstacles.
You pay the title company a single premium which includes the cost of verifying clear title and covers you in case some fault is later discovered in the title.
The title insurance company searches the property's title history. The title company can almost always find any title problems that may arise and clear up these problems prior to closing.
Because Real Estate Law is so complex, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem with the title to your property. Your owner's policy will describe the property and outline the limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you in the following cases:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. In this case, the title insurance company will defend your title and will cost you nothing.
- Defective title — This is a general term for a legal problem with the title that cannot be corrected and includes "contested title" above. Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Many other complex problems define "Defective title." The title company will uncover these title problems, or should they miss them, insure your loss up to the amount of the policy.
At Custom Lending Group, we answer questions about this process every day. Give us a call: (707) 252-2700.