Purchasing a home or other real estate property is no small deal. That is why getting title insurance is one of the standard steps home buyers take before closing on a home purchase. When you purchase a real estate property, you obtain “title” to the property, as the previous owner transfers their ownership to you. This is done by issuing a Transfer/Deed under the Land Titles system. Title insurance is crucial for a home buyer because it protects him and the lender from the possibility that the seller (or previous seller) doesn’t have free and clear ownership of the property and, therefore, can't rightfully transfer full ownership. Riverside Abstract is a Brooklyn based title insurance agency which suggests its clients the importance of knowing how title insurance works, how and why you could lose your home without title insurance, and how title insurance can protect you.
When a property is bought or sold, a record of that transaction is usually filed in public archives. Events that may affect the ownership to this property like liens or zoning restrictions also get archived. This is part of a property’s title. So when you purchase title insurance, a title company like Riverside Abstract runs a deep search through these and other records to detect any issues with the ownership of the property. If something does arise, you’ll be thankful for the protection your title insurance provides. This protects you from taking a financial downfall triggered by property ownership issues.
As a type of insurance, the title insurance covers potential damages from errors in the ownership records of your home or property. Here, Riverside Abstract title processors suggest that in most cases, you purchase title insurance when you get a mortgage. A title insurance policy pays the policyholder if there's anything wrong with the title for a property. So, when completing a real estate purchase transaction, lawyers will routinely order a title insurance policy that provides protection for both the buyer as well as the mortgage lender if the property is mortgaged. The focus under a title insurance policy is not to guarantee title but instead is on providing compensation or damages depending on the loss or claim.