A Cheat Sheet to Title Insurance
Title Insurance is a big part of what we do here at Hogan Land Title Company, so we decided we’d share a little insight with you on the ins and outs of title insurance!
Title Insurance protects real estate owners and lenders against loss or damage coming from liens, encumbrances, or defects in the title, or actual ownership of, a property. Title insurance does not protect owners from future events, however, it protects owners against claims for past occurrences. Some of these claims may include past property ownership, fraud, forgery regarding title documents, past payments from renters to property owners, liens against the property, outstanding lawsuits, etc.
There is a process involved with purchasing title insurance, but before the insurance policy steps in, a title search must be done. A title search is just simply an examination of all the history regarding the property. This includes past ownerships and property conditions that help future/current owners of a property refrain from incurring a loss on issues from the past.
There are two different title insurance policies that are involved with purchasing title insurance: a lenders’ insurance policy and an owners’ insurance policy.
Almost all mortgage companies require borrowers to have a lenders’ policy. A lenders’ policy protects the bank, or lender, against loss if there are any payment issues or problems regarding the title of a property.
While the lenders’ policy protects the lender, the owners’ policy protects the buyer of the property. It guarantees a reimbursement of any financial loss to the buyer in the case of a problem with acquiring the title.
Not having title insurance comes with a lot of risks. Title insurance helps future and current home buyers when it comes to digging into the past of a property of particular interest. Without title insurance and proper research, unpaid property taxes could be floating around the home of your dreams and you wouldn’t even know it was there until everything was all said and done!