If you already know what title insurance is then this may be a question that you’re asking yourself, and the simple answer is ‘no’. It’s not a necessity that you get title insurance when buying a property, but if you read on we can tell you why it is highly recommended that you do. But first, in case you don’t know, we should explain just what title insurance is.
Title insurance, unlike other forms of insurance, does not cover you for possible future events and hazards, but instead covers you against any pre-existing issues with the home you are buying.
How does it work?
A title agent, attorney, or a notary will begin a title search whenever an offer is made on a property. Over half of all real estate transactions come into problems somewhere along the line whether it be with the chain of title transference, or debts left by the previous owner; this is what you’re agent, notary, or attorney will look for. They will make a preliminary report for your review and approval, and after this demands must be paid, funds disbursed, and the actual policy created. Once this has been done your investment will be a little safer.
What does Title Insurance cover me for?
Title insurance protects buyers from any property damage or loss that might be caused by liens, encumbrances, or defects in the property title as well as other issues like forgery, fraud, encroachments, easements, or conflict of ownership interests. As with other forms of insurance it can depend upon what you put in your policy, but unlike other forms you only pay a one-off premium for this coverage.
So, do you need title insurance?
Well, no, but the truth is that it would be silly to not take it out if you can afford to; this insurance protects lenders, owners, and sellers against all kinds of pre-existing issues. As their home is the biggest investment most people will ever make, it makes sense that ever possible measure should be taken to safeguard this investment.