Title insurance is an insurance policy that guarantees that the property title is generally free from the problems of hidden liens and claims. Most title insurance policies protect purchasers against a loss arising when there is a title defect (when the status of the title to the purchased property is other than as represented), so if the insured (the purchaser) suffers a loss as a result of a title defect, the title insurance company will reimburse the insured for that loss, and any related legal expenses, up to the face amount of the policy, which is usually the original purchase price.
Title insurance differs significantly from other forms of insurance. While the functions of most other forms of insurance is risk assumption through the pooling of risks for losses arising out of unforeseen future events (such as death or accidents), the primary purpose of title insurance is to eliminate risks and prevent losses caused by defects in title arising out of events that have occurred in the past.
Title insurers perform an extensive search of the public records to determine whether there are any adverse claims to the subject real estate. Those claims are either eliminated prior to the issuance of a title policy or their existence is excepted (deleted) from the coverage offered.
Why should you obtain an Owner’s Title Insurance Policy?
Title insurance can provide a range of benefits to the Purchaser. As a purchaser of real estate, you should have protection against serious financial loss due to a defect in the title to the property purchased. A title insurance policy may cover both claims arising out of title problems that could have been discovered in the public records, and those so-called “non-record” defects that could not be discovered in the record, even with the most complete search.
How much does the Owner’s Title Insurance Policy Cost?
As a general rule, it is the custom in our market, that the Seller pays the one time, single, premium for the Purchaser’s Owner’s Title Insurance Policy, and the Purchaser pays the premium for the policy insuring Purchaser’s lender.
To learn more about how Max Gordon Real Estate Services can help with title insurance and the full range of your real estate needs, please contact us.