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Buying a home may be the biggest investments you’ll ever make. Homeowner’s insurance protects your investment against physical hazards like fire and theft, but it doesn’t cover you most precious possession – the security of your title to the property. Title insurance is the only way to ensure complete protection.
What does an owner’s policy cover?
An owner’s policy protects your interest in the property against such hidden hazards as:
For a one-time premium you pay during the closing process, your title insurer assumes responsibility for all legal expenses to defend the title to your property if it’s ever challenged. If the defense is unsuccessful, you’re reimbursed for any reduction in the value of the land. For you, it’s a win-win proposition.
What is a title search?
It’s a detailed examination of all available public records on a property to verify the seller’s right to transfer ownership and to uncover any potential challenges you might face. A title search should reveal such things as unpaid taxes, unsatisfied mortgages, judgments against the seller, and restrictions limiting the use of the land. However, even the most diligent search may fail to reveal some hidden hazards, such as those mentioned earlier. That’s where title insurance comes in.
How long does title insurance coverage last?
A lender’s policy lasts until the mortgage is paid in full. An owner’s policy remains in force as long as you or your heirs have an interest in the property. If challenges to title arise after the property as passed to your heirs, the title insurance company would defend the title for them just as it would for you.
How to find a title insurance company
You should choose a company with long-term experience and the financial strength to defend you should a claim arise.
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