Title insurance: Why do I need it?
By Chesley Payne
Title insurance is an insurance product sold by title insurance companies and agents in all 50 states. The purpose of title insurance is to protect the insured in the event a title issue arises that could threaten your rights concerning a parcel of property. Among the most common issues are old, unreleased mortgages and sues that come about when property is sold by someone without the requisite knowledge of how to property convey real property.
Title insurance is what the name implies, namely insurance. Therefore, what’s covered by a title insurance policy is set out in the terms of the policy. Most residential land owners obtain title insurance when they purchase their house.
However, it’s important to note that title insurance, like all insurance, only covers the person or entity named as the insured on the policy. Therefore, if you financed the purchase of your home, your lender will have requested and required you to pay for a lender’s title insurance policy. It’s important you make sure you will have a title policy in your name as well so that you’ll be covered in the event a title issue is discovered after closing.
While this situation isn’t common, the presence of a title issue can be an expensive proposition. In the event an issue is discovered and covered by your policy, your initial investment can save thousands of dollars in expensive legal fees and other amounts required to clear title. The peace of mind that can come from knowing you’re covered can save long nights of worry later. If you have a question about your coverage, contact the real estate attorney of your choice to discuss your situation.