FAQ: What is Title Insurance?
Similar to homeowners insurance, title insurance is a great way to ensure that you maintain the protection of your home and land. This may seem like an unnecessary form of coverage to purchase, but it is very often more beneficial than many people give it credit for.
Title Insurance Basics
Title insurance is coverage that homeowners receive when taking on a mortgage. Because there can be unforeseen problems that can arise from homeownership, this type of coverage can protect the insured from the loss associated with all of it.
Title Insurance Benefits
There are a number of reasons that an insured party can benefit from title insurance. Here are a few:
- Potential ownership changes over the years. Unless the land that you live on is owned by you and has been passed on through an inheritance and your home has been built from the ground up there is a chance that there may be a tangled web of owners linked to your house and land. If something unfortunate like a forged signature, or another illegal transaction occurred before you signed your mortgage, title insurance can protect you against subsequent legalities that may arise from the situation.
- Unpaid taxes or liens associated with the property. If you learn that there are unpaid taxes or some other type of lien against your property that occurred before you signed your mortgage, title insurance will cover the insured party for any claims or legal fees associated with the issue.
Title Insurance Mandatory?
Any person who needs to finance their home is required to purchase this type of coverage. This is because all mortgage lenders require some form of protection that equals the amount of the loan. The required form of title insurance does not protect the homeowner’s equity in the property an owner’s policy covering the full value of the house is required for this.
By knowing just what types of title insurance coverage is out there and whose interests are protected by them can help you understand just how you can benefit from them in the long run.