Investments in the form of real estate has always been regarded as the most valuable asset a person can have. Thus, it is imperative to make sure that this valuable asset is protected not only in the form of ordinary real estate insurances but also title insurance .
As we very well know, real estate is a form of asset that is protected by a lot of laws, and the laws are enforced to make sure that one’s ownership is protected. The owner, the owner’s family, the heirs of the owners and other entities such as lenders, contractors and the IRS may have interest on the property. Therefore, when acquiring any piece of property it is important that you are aware about any existing claims or rights to the property, because these rights or claims remains attached to the property until they are extinguished.
So how does a future owner or a buyer be able to determine if such claims exists? Well, that’s where title insurance companies comes in. They will run a research on the property to determine any claims on the property that may have an impact on the property’s title. The search will also detail any defects on the title such as tax liens, unpaid taxes and unsatisfied mortgages from the owner or past owners of the property. These, once accepted can either be resolved or extinguished before one goes into closing.
So why do we need title insurance? First, it protects the future buyer against any unknown or unreported defects, encumbrances and liens that are covered in the policy during the transaction. Secondly, you are protected against hidden risks or rights and claims not showing in the public record that can provide for a claim after the purchase of the property. Incompetency,forgery and fraudulent impersonation to name a few are considered hidden risks. In addition to these, title insurance gives the assurance that all defects that are discovered from the search will be corrected prior to closing and should there be any undiscovered claims covered by your policy as a result from the past to threaten your ownership, this will be disposed of or get reimbursed as per your title insurance policy provides. Furthermore, should there be threats against your ownership, as part of the policy, you will have a representation in court for free to defend and maintain your title ownership.
The one good thing about title insurance is that, there are a lot of title companies that are out there, available to fully explain the need of getting one and not to forget the fact that, unlike other forms of insurances, title insurance doesn’t require annual premiums to keep the policy in force. The original payment is all you have to pay as long as you and your heirs own the property. It’s a small amount to pay for your own peace of mind.