| Protecting your Home Investment | | | | An important part of title insurance is its emphasis on |
| A home is usually the largest single investment any of | | | | risk elimination before insuring. This gives you, as the |
| us will ever make. When you purchase a home, you | | | | policyholder, the best possible chance for avoiding title |
| will purchase several types of insurance coverage to | | | | claim and loss. |
| protect your home and personal property. | | | | Title insuring begins with a search of public land |
| Homeowner's insurance protects against loss from fire, | | | | records affecting the real estate concerned. An |
| theft, or wind damage. Flood insurance protects | | | | examination is conducted by the title agent or attorney |
| against rising water. And a unique coverage known as | | | | on behalf of its underwriter to determine whether the |
| title insurance protects against hidden title hazards that | | | | property is insurable. The examination of evidence |
| may threaten your financial investment in your home. | | | | from a search is intended to fully report all "material |
| Protecting Your Largest Single Investment | | | | objections" to the title. Frequently, documents that don't |
| Title insurance is not as well understood as other | | | | clearly transfer title are found in the "chain," or history |
| types of home insurance, but it is just as important. | | | | that is assembled from the records in a search. Here |
| You see, when purchasing a home, instead of | | | | are some examples of documents that can present |
| purchasing the actual building or land, you are really | | | | concerns: |
| purchasing the title to the property - the right to occupy | | | | - Deeds, wills and trusts that contain improper wording |
| and use the space. That title may be limited by rights | | | | or incorrect names; |
| and claims asserted by others, which may limit your | | | | - Outstanding mortgages and judgments, or a lien |
| use and enjoyment of the property and even bring | | | | against the property because the seller has not paid |
| financial loss. Title insurance protects against these | | | | his taxes; |
| types of title hazards. | | | | - Easements that allow construction of a road or utility |
| Other types of insurance that protect your home | | | | line; |
| focus on possible future events and charge an annual | | | | - Pending legal action against the property that could |
| premium. On the other hand, title insurance protects | | | | affect a purchaser; or |
| against loss from hazards and defects that already | | | | - Incorrect notary acknowledgments. |
| exist in the title and is purchased with a one-time | | | | Through the search and the examination, title problems |
| premium. | | | | are disclosed so they can be corrected whenever |
| Two Kinds of Title Insurance Benefit You in Two | | | | possible. However, even the most careful preventative |
| Ways | | | | work cannot locate all hidden title hazards. |
| There are two basic kinds of title insurance: | | | | Hidden Title Hazards - Your Last Defense |
| - Lender or mortgagee protection, | | | | In spite of all the expertise and dedication that go into a |
| - Owner's coverage. | | | | title search and examination, hidden hazards can |
| Most lenders require mortgagee title insurance as | | | | emerge after closing, resulting in unpleasant and costly |
| security for their investment in real estate, just as they | | | | surprises. Some examples of hazards include: |
| may call for fire insurance and other types of | | | | - A forged signature on the deed, which would mean |
| coverage as investor protection. When title insurance | | | | no transfer of ownership to you; |
| is provided, lenders are willing to make mortgage | | | | - An unknown heir of a previous owner who is |
| money available in distant locales where they know | | | | claiming ownership of the property; |
| little about the market. | | | | - Instruments executed under an expired or a |
| Owner's title insurance lasts as long as you, the | | | | fabricated power of attorney; or |
| policyholder - or your heirs - has an interest in the | | | | - Mistakes in the public records. |
| insured property. This may even be after you have | | | | Title insurance offers financial protection against these |
| sold the property. | | | | and other covered title hazards. The title insurer will |
| Depending on local practices and state law where the | | | | pay for defending against an attack on title as insured, |
| property is located, you may pay an additional premium | | | | and will either perfect the title or pay valid claims. All |
| for an owner's policy or you may pay a simultaneous | | | | for a one-time charge at closing. |
| issue charge - usually a smaller amount - for the | | | | Your home is your most important investment. Before |
| separate lender coverage. You may even split | | | | you go to closing, ask about your title insurance |
| settlement costs with the seller for the lender or | | | | protection, and be sure to protect your home with an |
| owner's policy. | | | | owner's title insurance policy. |
| What does Your Premium Really Pay For? | | | | |