What is title insurance?
By Wayne B. Pruner
http://www.yourhomeinportlandoregon.com/
Wayne's Portland Oregon area Real Estate blog
www.activerain.com/waynepruner
Buying a home is the biggest single investment most of us will ever make. You probably have several forms of insurance already: medical, life, car, and homeowners. Title insurance is your policy of protection against any defects in title against your property. You are protected against risks and insured against losses. Defects in the title to your property can cause you to lose all or part of your investment. There may be prior, outstanding claims against the property, that the seller does not reveal or know about.
A title search is a detailed search of the public records concerning a property. The records include deeds, county and court records, and many other documents. Its purpose is to verify the seller's right to transfer ownership and to discover any claims, liens, defects, and other rights and burdens on the property.
A title search may reveal:
- Unpaid taxes
- An unpaid mortgage
- Judgments against the seller
- Unpaid special assessments
- Easements that go with the property
- Claims from an ex-spouse
- Undisclosed heirs
- A fraudulent transfer in the past
- Or an overlook prior lien
Any of these defects, and others, may arise after you have purchased your home and jeopardize your ownership rights.
In accordance with the terms of your policy, you are assured of a legal defense, and the payment of court costs and related fees. If a loss is sustained, you are protected up to the full amount of your policy.
There are two types of policies: A lenders' policy protects the lenders' interest in the property which is the security for the outstanding balance of the buyers mortgage; and the owners' policy safeguards the buyers' investment or equity in the property up to the face amount of the policy.
The cost of title insurance on a piece of property is very small when compared with the benefits and security it gives. Unlike other forms of insurance, the are no annual payments to keep the policy in force. The original premium is the only cost as long as you or your heirs own the property.
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