We all buy insurance. Life Insurance; auto insurance; homeowners insurance to protect against fire, theft; flood insurance. So why not title insurance?
Keep this in mind. When you purchase a home you are actually purchasing the “title” to the property – the right to occupy and use the property.
When you receive a deed to a home, that deed only allows you whatever rights the seller had in the property. If the deed to the seller had been forged, then he had no rights to convey to you.
Nothing else you will ever own has a useful life comparable to land. Owners sell, buyers buy, owners die, heirs sell, but the land remains. When you buy a home, you are buying years of history and volumes of paperwork that support the “title”. The types of rights in land are so complex that a separate body of laws exists for real estate.
In order for us, or anyone, to insure your title, we need to examine the history and paperwork that supports your title. In 2005, an American Land Title Association survey showed in 36% of all residential real estate transactions, title problems were discovered.
Even after an exhaustive title search, hidden hazards may arise. Forgery, fraud, recording errors, missing heirs, undisclosed spouses are just a few.
An Owners Title Insurance Policy protects a buyer against these defects. The company either corrects the problem, or pays you for your loss.
Homeowners Insurance was mentioned at the beginning. Look at Owner’s Title Insurance this way:
For roughly what you pay for one year’s coverage by a homeowner’s policy, you can purchase an Owner’s title insurance policy that will protect you and your heirs for as long as you own the property.