And now, for some legalisms...
A title insurance policy is a legal contract, the terms and applications of
which are governed by the laws of the state in which you reside. Therefore, in
the unlikely event of a conflict between the statements made in this web page
and the terms and conditions of the actual policy, the actual policy will
govern. You may wish to consult with an attorney concerning title insurance, as
well as all phases of any real estate transaction in which you may enter.
Why is Title Insurance Important to Homeowners?
With auto insurance, you protect yourself against experiencing financial ruin if
you are involved in an automobile accident. With life insurance, you protect
your family against being left penniless in the event of your untimely death. In
addition, with homeowners insurance, you protect yourself and your family
against having to shoulder the full cost of rebuilding if your home and
possessions are destroyed by fire or by another catastrophe.
BUT are you protected if you lose, through no fault of your own, ownership of
your single largest financial asset? Research shows that your home is probably
the single largest asset you will acquire during your lifetime. Suppose you were
to find out that the person who sold you your home did not own it. Are you
protected from a claim against the ownership of YOUR very own home?
This is where title insurance comes in. When you buy an owner's title insurance
policy, you are protecting yourself and your family against claims to the title
(ownership) of your home. Your home will be there for you and your family - a
place to live, and a guaranteed investment for your retirement and future.
What is Title Insurance?
Suppose you receive a letter or a knock on your door, and someone tells you that
the deed to your home is a forgery. Or suppose you receive a letter from the
local taxing authority informing you that they are about to auction off your
home, because the prior owners failed to pay their real estate taxes. What if
you find that your neighbor's fence or garage is actually built on your
property, or vice-versa?
Title insurance protects you against having to make expenditures on your own if
any of these or similar events occur, providing that your policy contains no
exceptions or exclusions for the event. A policy of title insurance insures that
you actually own your home, and you are not subject to the interests of other
persons (other than those persons and matters disclosed and excepted or excluded
from coverage in the policy). If the information upon which the title insurance
is based is incorrect, and a claim is asserted against your ownership of the
home, then the policy indemnifies or protects you from experiencing a financial
loss directly attributable to the covered claim.
How does this Work or What is the Process?
Before you close or settle upon the purchase of your home, your lawyer, real
estate agent, or lender will ask a title company to examine or search the title
to your soon-to-be-acquired house, as well as the land on which it sits. The law
refers to the house and the land together as real property. The searcher or
examiner looks at the public records in the local courthouse, as well as in the
various municipal and local governmental offices having jurisdiction over the
real property to determine the status of the property's title. This search or
examination will uncover any judgments, mortgages, taxes, assessments, charges,
or other liens which may encumber or adversely affect the property's title. In
particular, a historical search or examination will be made of the prior owners
of the property. This will determine whether they had "good" title to the
property, or whether they did anything during their ownership of the real
property to encumber or adversely affect the property's title.
Once the examiner or searcher has completed this process, the title company will
compile the information and prepare a Certificate or Commitment that reports on
the status of title. The Certificate or Commitment will list as exceptions or
exclusions to title all encumbrances, liens, or other adverse matters that were
found. This process is completed before you purchase the property. If these
matters are not cleared up or resolved by the end of the closing or settlement,
the matters will be excepted from the coverage provided by the title policy, and
the policy will not cover any loss caused by or arising from the excepted
matters.
Unless the title company takes a specific exception in the title policy, the
policy will protect you from having a financial loss because of, or arising from
matters such as someone else owning your home, a forgery or fraud in the prior
title, lack of legal access to the property, or the existence of undisclosed
liens such as taxes, mortgages, assessments or charges, as well as many other
matters which affect the ownership of the property.
If someone makes a claim, United General Title protects you by defending your
interest in any court case and paying the costs, attorney fees and expenses
incurred in that defense. If the court finds the claim valid, United General
will pay the cost of your claim up to the amount of the policy or will
undertake, at its own expense, the responsibility of correcting the problem.
Unlike all other forms of insurance, for this substantial protection you pay
only ONE PREMIUM at the time of closing or settlement! In addition, if you
purchase an owner's and mortgage policy at the same time, depending upon your
state's laws, you may be entitled to a substantial discount in the cost.
But Doesn't the Bank's Policy Cover Me?
The short answer is "No."
There are two kinds of title insurance policies: the fee or owner's policy and
the mortgagee or lender's policy. If a claim arises from a covered loss, the
bank or lender will be paid in accordance with the terms of the mortgagee or
lender's insurance policy. However, just as a life insurance policy on someone
else's life does not provide any coverage to your family, the bank's title
insurance policy will not protect you if there is a loss.
For example, if your deed turns out to be a forgery, the mortgage policy will
cover the bank and pay off your mortgage. But unless you have purchased a fee or
owner's title policy, you will not be paid anything for the loss of your home,
your largest financial asset. It's up to you not to let that happen. For a
single, one-time premium, you are covered for as long as you own your property.
Articles that appear on our website are for information purposes
only. The nature of this information in all of our articles is intended to
provide accurate and authoritative information in regard to the subject matter
covered. It is posted with the understanding that Mobile Settlement Services,
Inc. is not engaged in rendering legal, accounting, or other professional
services. If legal advice or other expert assistance is required, the services
of a competent professional person should be sought. Mobile Settlement Services,
Inc. has taken reasonable care in sourcing and presenting the information
contained on this site, but accepts no responsibility for any financial or other
loss or damage that may result from its use.
Timeliness: Note that most articles published on our website remain on our
website in perpetuity. Only those articles that have been published within the
most recent months may be considered timely. We do not remove articles
regardless of the date of publication, as many, but not all, of our earlier
articles may still have important relevance to some of our visitors. Use
appropriate caution in acting on the information of any article.
Legality: We are a website and title insurance company, we are not a law firm
and we do not offer legal advice nor do we guarantee the legality, worth, or the
accuracy of the content of any article which appears on our website. The
verification of all information and its legal bearing is the sole responsibility
of the visitor.
