If you’re buying a home, you might be wondering whether or not you need title insurance. If you’re getting a mortgage, then your lender will require you to purchase a lender’s title insurance policy; but you also have the option to purchase one for yourself.
But what is title insurance?
We asked one of our favorite title company partners, Double Eagle Title, to explain.
Here’s what Chris Melnick said:
What is title insurance and why buy title insurance?
Title insurance is an indemnity contract by which the insurer (title insurance company underwriter) agrees to indemnify the insured( purchaser) against losses covered by the policy. Title insurance is one premium agreement to indemnify a policyholder, in amounts not to exceed the face value amount of the policy (the contract sales price), for losses caused by either on record and off record defects that are found in the title or interest in and insured property to have existed on the date on which the policy is issued .
Title insurance protects the purchaser of real estate property from issues such as:
1) Errors or omissions in deeds
2) Invalid deeds
3) Mistakes in recording legal documents
4) Mistakes in examining public records
5) Identification fraud
6) Forgery and theft
7) Undisclosed or missing heirs
8) Liens for unpaid taxes
Over our years in real estate, we have not seen things like this happen very often, but when they have, our clients have been very grateful they bought title insurance. (It’s kind of like health insurance. When you’re young & healthy, it seems like a waste of money to pay for insurance. But if you’ve ever been in an accident or dealt with a catastrophic illness, then you know how important that insurance can be.)
If you have specific questions about settlement costs, title insurance or any of the above situations, contact Chris Melnick with Double Eagle Title. He’s our “go-to resource” for title & settlement questions!