Why Title Insurance?

To protect you! It is designed to protect you against the losses that can occur after closing when it's discovered that someone else has a claim against the title to your property. A title search is a close examination of public records that involve title to the property you are purchasing, to ascertain that the "chain of title" has passed correctly to each new owner, and to insure that no defects in title to your property exist that may cause problems for you later. Title examiners typically determine that all possible liens including prior judgments, mortgages, back property taxes, or other potential liens are paid in full before you close the real estate transaction. However, errors or unanticipated claims can occur. Title Insurance transfers this risk from you to the insurer and may reimburse you for any loss or devaluation of your property as a result of a claim.

There are two types of title insurance, Owner's title insurance, and Lenders title insurance, which is also known as a Loan or Mortgage policy. The vast majority of lenders require a loan policy when they furnish you with a mortgage loan. They recognize the importance of good title. Shouldn't you?

Owner's title insurance is most commonly issued for an amount equal to the purchase price of the property. The policy lasts as long as you or your heirs have an interest in the property, and can be purchased for a one-time fee at closing. Owner's title insurance protects the buyer should a problem arise with the title that was not discovered prior to the closing of your purchase. The policy also pays for any legal fees incurred in defending a claim to your title. Loan policies are usually based upon the amount of your loan and insures that your lender will not have a title claim that interferes with its mortgage.


Clouds on the Title

If a problem, otherwise known as a "defect" or "cloud" on the title is found, it should be corrected before closing. Rights others may hold can include, but are not limited to: outstanding mortgages, judgment liens, construction liens, rights of way, easements, mineral rights, utility easements, possessory rights (right to rent or occupy), and pending legal actions.

Title insurance is there to protect you from the ever present potential for human error that could result in such a cloud interfering with your ownership of the property. Even expert title examiners can overlook a defect that can cast a cloud over your title. Title insurance does not cover defects that arise after your purchase of the property, and depending on the type of policy, there may be exclusions for certain types of title defects such as navigational rights, mineral rights, liens, easements, and encroachments. At All City Title Company any and all exclusions you do not understand will be thoroughly explained to you before closing.

Considering all that it protects, title insurance is relatively inexpensive. It is one of the best investments you can make for your new home or other real estate property investment, providing you piece of mind and protection during one of the more important transactions you will make.

All City Title Company is here to protect your interests!