Title insurance is a type of insurance that protects the owner against a variety of risks. Unlike other forms of insurance, title insurance eliminates risks from the past by searching public and private records. The insurer will also exclude certain risks if the property has been the subject of an adverse claim.
Owner’s Title Insurance
Owner’s title insurance protects the equity in your home and your right to live there. While you’re not required to have this policy, it’s a good idea to have if you’re buying a home. In addition, it’s important to protect your rights as a home owner and prevent future legal fees.
Home ownership is the foundation of building long-term wealth, but it can also be threatened by liens and other claims that may be on the title. Owner’s title insurance protects you from this possibility and gives you peace of mind when it comes time to sell the property.
Encumbrances In Real Estate Title Insurance
Encumbrances in real estate title coverage are claims placed on a property. They can be both positive and negative, and affect a property’s ability to sell or transfer ownership. If you’re selling or buying a home, it’s important to know about encumbrances before signing any contracts.
Many encumbrances are beneficial to the property owner. For example, a homeowners’ association can help a property’s resale value. Residential zoning restrictions may help keep noise and traffic to a minimum. On the other hand, high-voltage power lines can adversely impact a property’s value.
Fraud And Unknown Owners In Real Estate Title Insurance
Real estate title insurance protects you from a variety of issues, including fraud and unknown owners. For example, it can protect you against fraudulent deals, and it also protects you from using your home as collateral for loans. Phenix Title Services has professional agents with the knowledge to help you find the right policy for your needs.
Fraud and unknown owners in real estate title policies are not common, but their impact can be devastating. These situations typically involve innocent buyers who purchase a beautiful home site through a realty company and accept a notarized deed from the seller. Afterward, the property owners were found to reside in a different locale. Fortunately, the title company provided a settlement to protect the buyer from a loss. Fraudulent owners often target elderly homes and vacation properties, as their owners may be slow to react to changes to their public records. They often first discover an unfamiliar address by getting mail that does not belong to them.
Requirements For Getting Title Insurance
When you buy a home, you will need to purchase real estate title insurance. Despite the high cost, this insurance protects your interest in the property in case you face legal troubles down the road. You pay for it one time at closing, and it provides coverage for as long as you own the property. Unlike other types of insurance, title insurance does not have a deductible. Moreover, it covers only existing title defects. It does not protect you from future risks, such as property theft. Title insurance premiums are usually based on the purchase price or the amount of your loan, and most states regulate premium rates.
Real estate title insurance is a necessity for both homebuyers and lenders. It protects them from the risks of loss or damage caused by encumbrances, liens, and other issues relating to the property’s title. However, the policy comes with terms and conditions and may include exclusions. Ensure that you understand your title insurance policy carefully before buying a home.