Title insurance protects a policy holder in the event that there is a fault or defect with the title of a property. For example, if there is a lien against the property, outstanding taxes or an inheritance gives a third party a claim to the property, the insured will be covered for any losses incurred as a result. Other than these instances, cover may also be provided in the case of claims to the property made by a spouse in a divorce settlement, by a relative or family member, misprints in the title records or due to fraud.
Two Types Of Title Insurance
There are two types of title insurance – lender insurance and owner insurance. Lender insurance can be bought either by the lender financing the purchase of the property or the borrower. In both cases, the lender is the policy holder and is therefore protected by the insurance. Owner insurance can be purchased by either the seller or the buyer where the buyer is the policy holder and therefore covered by the insurance.
Lenders will often require title insurance before financing the purchase of the property. The borrower will be responsible for the cost of the insurance but the lender will recover any losses that may be incurred as a result of a defect. On the other hand, a buyer may request that a seller purchase title insurance in order for the buyer to be covered in the event of any unforeseen future losses.
Title Searches, Examinations And Reports
In most cases, the title of a property will be searched and examined for any defects. This search is extensive and a report will be created of the results that were found. However, there are times when defects can go unreported or where the title is complicated and it may be difficult to determine whether there may be any defects. The title report should be professionally evaluated in order to determine whether there are faults and to consider if title insurance may be necessary.
Title Company Services
These types of title searches, examinations and reports are normally handled by and expert title company. After the report has been delivered, it is advisable to have these experts evaluate the report and make a recommendation as to whether title insurance may or may not be necessary.
Cities Title Services provides a comprehensive list of services to provide for every requirement in a real estate transaction and will offer the best advice as to whether title insurance is necessary for your property transaction.