Title Insurance

Title Insurance Protects Homeowners and Lenders

What is Title Insurance?

Purchasing a home is one of the largest investments and complex transactions that you can make, and acquiring a title insurance policy may not be on the top of your to-do list. In reality, the purchase of a title insurance policy is extremely important and guarantees full protection to you as the property owner. Title insurance is a policy that you purchase from a title insurance company, or an authorized agency, when buying a home or property. Put simply, it ensures that you legally own your property, and no encumbrances exist that will impair the interest you have purchased. The policy is predominantly found in the United States and protects property owners and lenders against financial loss incurred by defects in title to the real estate. In the event of a loss, the insurance policy providers for reimbursement of the amount of the loss, as well as expenses incurred as a result of the defects.

What types of title insurance policies are there?

There are various types of title insurance policies, the two most common being: owner and lender.

Owner Insurance Policy

Protects the homeowner from any issues that might emerge after closing a sale. An owner’s insurance policy will also protect the buyer as well as legal fees originating from a title dispute after a sale has been made. The policy is paid for once issued; and insures the owner for as long as the property is owned. This policy protection is limited to the market value of the property at the time it is purchased. If the property value increases, you may need to purchase additional coverage through your title insurance provider.

Lender Insurance Policy

Also know as a “loan policy,” lender insurance is provided exclusively to mortgage lenders, and protects them from issues stemming from various title defects occurring before the policy date. The policy is issued in the amount of the mortgage loan and decreases as the mortgage is paid off. It is important to note that while lender’s title insurance protects the lender’s interest in the property up to the amount of the loan amount, only an owner’s title insurance policy will protect the property owner’s equity. Have more questions regarding title insurance? Then contact us here or email us at info@firsttitleservices.com.