All About Title Insurance
What is Title Insurance?
Title insurance gives you the assurance that the property you are purchasing is free and clear of any defects in the chain of title found in the public records. Put simply, the policy protects you in case someone tries to lay claim to your property. If you have Title Insurance, your insurer will fix the problem, defend you against it, or compensate you for any losses that arise from it. If you are buying a home and getting a mortgage the bank will require you to get title insurance. The Closing Attorney will perform the Title Commitment Review and facilitate the Title Insurance being issued on the property. If you have any questions or concerns about your title policy, please reach out to your Thrive Advisor anytime.
What does title insurance cover?
Title Insurance covers problems arising from unpaid taxes, fraudulent or forged documents, incorrectly recorded documents, improper liens, undisclosed claims from an heir of a previous owner, and even undisclosed easements or past violations of covenants by previous owners.
How does the title company find out what, if any, defects are on title?
In order to determine what is on title, the title company does an exhaustive search of the public records for the documents associated with the property. They then determine if there are any rights or claims that may have an impact on title such as previous mortgages, unpaid taxes, recording defects, judgments, encumbrances etc. Once reported, the seller and the title company resolve any issues prior to closing to give you peace of mind your property is free and clear, aside from any new financing you may be obtaining.
What types of title policies are there?
Typically there are 2 types of title policies; the Owners Policy and the Lenders Policy. The Owner’s Policy insures the owner from any defects from previous owners. If the buyer is obtaining a loan the lender will also require a Lenders Policy, which is the second type of policy. This policy protects the lender’s interest in the property and is paid for by the buyer (ie. the person obtaining the loan).
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