Title Insurance Explained

For Property Owners:
When a property owner has title insurance it signifies that they own the property and are free of liens other than any they may have agreed to when they bought the property themselves.

Most importantly, this means that the party that sold the property truly did own all of the interest and nobody else can claim interest. This safeguard remains so long as the insured party owns the property in question.

For Lenders:
Title insurance serves as a solid assurance that there is a true and legal lien (loan or deed of trust) held by the property and that nobody else (besides those on the policy) has a previous claim to it.

Also, this means that the party they are carrying out the loan with truly owns the property being implemented for said loan. Notably, this protection stays intact so long as the loan remains unpaid.

Benefits:
A title policy encourages banks, commercial banks, savings and loan associations, life insurance companies, and others, to loan money. This is because it establishes safety for them if the borrower does not make payments.

Essentially, the title company ensures that the property title is truly marketable should there be a foreclosure. This guarantee is supported by the solvency and integrity of the title company itself.

Costs:
Title insurance gives coverage based off of what has already taken place, rather than what might happen – like with life, health, and auto insurance. There is a one-time fee when the property is refinanced or purchased. Overall, this fee is very reasonable because a single policy could last an entire lifetime.

After the one-time fee, the title company pays for legal expenses and costs that come up with any valid claims that are presented. Without this policy, instead of benefitting from this coverage, people would have to cover all costs themselves.

Overall, title insurance gives peace of mind to those who are making big investments with their own money. Title insurance companies assist in protecting these investments with their financial prowess and reputation.