TITLE INSURANCE – what you get to protect your legal right to that property
There are two types of title insurance: lender and owner. Lender’s title insurance protects the lender, not you, against defects in the title. It is typically required by your lender when you purchase a property with a loan, and covers the lender up to the amount of the loan.
Owner’s title insurance is separate, and it protects the owner. The policy is issued after a title search takes place, but since title searches are not 100% infallible, the insurance is a worthwhile investment. A basic policy protects you against issues that occurred prior to your purchase date, but have not yet been discovered (see examples below). An enhanced owner’s policy includes everything the basic policy covers, and in addition, covers prior building permit violations, incorrect surveys, claims against your property that may occur in the future, and more.
Title searches are performed by Cumberland Title to insure the person selling the home is the true owner, and that there are no liens or other claims against it. Owner’s title insurance protects you, the buyer, and the biggest monetary and emotional purchase of your life – your home.
Title insurance protects you and your home against:
- a chain of title that may be a forgery
- a deed or mortgage that may have been procured by fraud or duress
- a heir or other person presumed dead that may appear and seek to recover his or her share of the property
- a deed or a mortgage that may have been signed by an incapacitated person or incompetent person
- a deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner
- a defect in the recording of a document upon which your title is dependent
Additionally, owner’s title insurance:
- covers attorneys’ fees and court costs
- helps speed negotiations when you’re ready to sell or obtain a loan
- reimburses you for the amount of your covered losses
Over the last 24 years, claims have risen dramatically. The lawyers at Cumberland Title recommend that their clients procure title insurance. It is a ONE TIME fee paid at closing, and protects you for as long as you own that property.