Because your home is probably the most important investment you will ever make, you want to do all you can to protect it. One of the ways you can do that is through homeowner's insurance. But even the most comprehensive homeowner's policy won't help if your right to the property itself is questioned. That's why owner's title insurance should be an essential part of the home-buying process.
The FAQ on this page should help explain why protecting the title to your property is one of the most important aspects of home ownership.
What is Title Insurance?
The legal answer is "the application of insurance principles to hazards inherent in real estate titles."
What is Title?
"Title" is the foundation of ownership property. It means that you have a legal right to possess that property and to use it within the restrictions imposed by authorities or limitations on its use-superimposed on the basic right to possession by previous owners.
Why does buying a home differ from all other purchases?
No other property has a useful life that compares with that of land. Owners die, new ones succeed, but land goes on forever. Owners of goods may change their locations at will, but land is immovable, it lends itself to the absorption of innumerable rights. Over the ages, this is has so impressed lawyers and jurists that they formed a separate body of laws for land. These laws, creating many types of rights in land, are so numerous and so complex it is impossible for there to be a mathematical certainty of ownership.
What is meant by title defect?
Anything in the entire ownership of a piece of real estate which may encumber the owner's right to the "peaceful enjoyment" of the property or which may cause the owner to lose any portion of the property.
Is an attorney's opinion sufficient if he or she has examined the title?
There are many defects which even the most astute title examination will not uncover. The attorney isn't liable for loss caused by hidden defects.
Will a General Warranty Deed fully protect me?
The chance of recovery is dependent entirely on the financial ability of the grantor to pay at the time that judgment is acquired.
What is an Abstract?
A condensed version of the recorded documents affecting title to the property. Same liability as an attorney's opinion.
The contract I signed makes the sale subject to the property's title being insurable. Doesn't that protect me?
If anything should happen to defeat the title, your cause of action would be against the seller, and his ability to pay. Attorney's fees and expenses would not be covered.
The real estate broker said the title is good. Isn't that good enough?
No one can be sure the title is clean.
What happens if my home is protected by title insurance and it's challenged?
You notify the title insurance company and they defend the title, even if it goes to court. The title company bears all expenses.
The person I'm buying the house from has insurance. Why do I need it?
The deed into the new owner could be defective because of forgery, incompetence, easements, construction, encroachment or any number of other circumstances.
How does title insurance protect my home?
It places the assets of a corporation behind the title to your home. If attacked, the title will be defended without cost to you and if the title, or any part of it, should be defective, you will be reimbursed, up to the face amount of your policy, for any financial loss incurred.