Why do you need title insurance?
Home or property ownership is one of the most important investments you will ever make. Title insurance protects against hidden title hazards that may threaten your financial investment in your home.
Title insurance provides coverage for lenders and owners. Most lenders require mortgage title insurance as security for their investment in real estate. A lender’s policy insures that the mortgage is valid and the lien priority is correct.
For you, the homeowner to be covered, you must purchase an owner’s policy in addition to the required lender policy. Purchased with a one-time premium, Owner’s title insurance differs from other types of insurance, such as Homeowner’s, which focus on possible future events (fire, theft, etc.) and charge an annual premium. Owner’s title insurance protects you, the policy holder, or heirs with an interest in the property from any title claims arising from previous ownership.
Examples of why title claims may arise:
- Forged deeds, releases or wills
- Fraud in the execution of documents
- Wills not properly probated
- Undisclosed or missing heirs
- Unsatisfied claims not shown on record
- Deeds executed under expired or false powers of attorney
- Incorrect public records
When you have title insurance coverage, the title insurance company incurs the expense of determining the validity of a claim and defending against the claim. If there is a title defect, the title insurance company pays the claim so that the purchaser retains ownership without loss, or compensates the owner for any and all losses incurred as a result. The cost of the owner’s title insurance premium is modest in comparison with the potential loss from a claim.
There are two different types of Owner's Title Insurance Policies. The standard policy covers you for defects and liens in the history of your title through the date and time your Deed is recorded in the public records. The ALTA Homeowner's Policy of Title Insurance provides coverage for many additional risks, including some which may occur after the deed is recorded. Click here for a coverage comparison that will help you decide which policy is the best for you to protect your ownership in your home.
Before you close, ask about your title insurance protection, and be sure to protect your home with an owner’s title insurance policy.
Northwest Title & Escrow is dedicated to ensuring all parties leave the closing table satisfied and happy with their experience. Our commitment to provide superior customer service is our top priority. All borrowers can elect to use NWTE for their closing.
Contact us to discuss your needs. We look forward to being of service.