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What Does Title Insurance Cover?

a new home can be exciting, but it can also be confusing. There is so much involved when property changes hands and, truth be told, the closing process can uproot some hidden title issues.

Title experts work to resolve any issues so they can ensure that your new property’s title is free and clear before you take ownership of it. Your seller (per contract) will purchase title insurance to protect you from anything that may have been missed during the title search - including anything that jeopardizes your rights to the property.

What is Title Insurance?

A title search is performed to review the records and deeds concerning the property all the way back to its beginning. This is a way of making sure that the seller actually has the right to sell the property to you and that there are no title issues, such as:

  • Outstanding property taxes

  • Judgments

  • Errors in legal descriptions

  • Easements

  • Encroachments

  • Forgeries or fraudulent documents

  • Unknown heirs

  • Erroneous recordings

  • Bankruptcy filings

Should any of these appear in the title search, they will need to be taken care of before the sale can proceed. However, sometimes things get missed.

Every now and then, for one reason or another, one of the aforementioned title defects doesn’t show up in the search. When relying on public records, for example, it is not uncommon for documents to get filed improperly and not appear in a search related to your specific property.

Title insurance protects your rights should a title defect arise after you take ownership.

What Does Title Insurance Cover?

Title insurance can cover the complications and defects of title that arise once you take ownership. As we said, ideally these things need to be taken care of before the sale goes through. But when they aren’t, they can bring serious risk - and can put your rights to your new property in jeopardy.

Attempting to fight the issue can potentially be expensive and cause a lot of aggravation. Many times these cases can land in court and you may find yourself dealing with court fees, attorney fees, and more. It is a huge headache that can be avoided with a title insurance policy.

So, what does title insurance cover?

Title insurance is different from other types of insurance. Rather than protecting you from future things that may happen to your new home, it protects you from things that have happened in the past. All the title issues we discussed above, such as liens, judgments, unknown heirs, forged deeds, and so on are covered with a title insurance policy should they arise. In other words, you simply file a title insurance claim and move about your day.

Who is Protected By Title Insurance?

There are different main types of title insurance: Owner’s Title Insurance and Lender’s Title Insurance.

An Owner’s Title Insurance Policy protects the new owner of the property. It will also protect the owners’ heirs as long as they own the property.

A Lender’sTitle Insurance Policy protects the lender. They are taking a risk in loaning you money for the property and want to protect their interest in it. A lender’s policy is a condition of the loan and it only protects the lender. It offers them protection until the mortgage is paid in full.

Title Insurance Coverage in Ohio

Title insurance is very important. If you are getting ready to buy a new home or are in the process, the title experts at Service Title Agency are here to walk you through the process. And, they are always willing to answer any questions you may have or address any concerns.

Contact us today at (614) 923-9600.

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