Q: Why Do I Need Title Insurance?

a: Title Insurance I sometimes misunderstood. Unlike most insurance which protects against the risk of future events, title insurance protects you against events from the past that may affect the title of your property.

Even the most careful title search will not always reveal some events that could adversely affect the title to your property. Title insurance policies generally cover losses for mistakes made in researching, abstracting and examining the title. It also covers items that cannot be discovered by a title examination in the public records such as: mistakes in public records, fraud or forged title instruments, undisclosed heirs, adverse possession and other undisclosed prescriptive rights, etc. A title insurance policy will financially protect the insured partly by paying its legal defense fees and monetary claims, should unexpected items that are not of record arise.

Q: Should I Buy Owner’s Title Insurance?

a: For a one time additional premium, you can obtain an owner’s policy of title insurance to protect your equity in the property. An owner’s policy not only protects you against monetary loss for as long as you own the property, but it also covers you after you sell it. If a flaw in your title results in loss for a subsequent owner, your policy can protect you from claims of damages.

Q: What Kinds of “Defects” Are Covered?

a: There are many types of title flaws that can result in inconvenience or loss after purchase. Many potential problems are uncovered during the title examination and cleared before closing. From time to time, despite the best efforts of the title company, title problems do occur and damages are paid. Some of the more frequent problems are: forgery of mortgage releases, forgery of powers of attorney, undisclosed heirs and unrecorded easements.