The answer is pretty simple. Title insurance protects both property owners and lenders against loss or damage that might occur because of liens, encumbrances, or other such defects in a property’s title. Each title is unique, subject to its own terms, conditions, and exclusions.
Getting a title is one of the main steps of buying a home. A title legally confirms that you own the property and obtained it from the seller, and it protects the new property owner from anything they couldn’t have seen coming related to their new property.
Having title insurance protects you, the property owner, from financial loss thanks to defects in the title. A good title insurance company makes sure to cover all potential claims, like outstanding liens, back taxes, and conflicting wills, within the title insurance policy.
A title insurance policy protects a property owner from investing a substantial amount of money in a property only to find out there are issues that render the title invalid.
For further protection, a title insurance company does a title search to make sure the seller has the legal rights to sell to the new buyer. With title insurance, you are protected from any serious losses in this situation.
What Title Insurance Covers
The two types of title insurance are owner’s title insurance and lender’s title insurance, but for the purpose of this article, we will focus on owner’s title insurance.
Owner’s title insurance is purchased as a safeguard against hazards during the buying process. An owner’s policy protects you against:
Do I Need Title Insurance?
In every case, a lender’s policy is required – but an owner’s policy is optional. Even still, the consequences could be serious if you opt out of purchasing – if you come across unpaid liens, fines, or code violations, for example, on your new property, without owner’s title insurance, the financial burden is on you.
The Protection of Title Insurance
At Heights Title, we want to make sure buyers and lenders alike are protected with title insurance. Let us help you with your title search – we’re the right company for the job. Get in touch with us today to get started.