For many buying property is one of the largest investments they will ever make. People buy a house, turn it into a home and plan to hand it down to their children. Protecting that investment is important, and obtaining a home is no easy task. Title insurance may be one of the most overlooked ways for people to protect themselves and their purchase during the home buying process. Title insurance is used to protect the buyer from legal claims both other people and provides compensation for loss.
Should Opting Out Be An Option
Title insurance is a guarantee for the buyer against financial losses caused by people who believe they have a legal claim on it. This includes people who are owed money and produce liens as well as people who sell real estate under false pretenses. These items cannot be found in a records search, and title insurance would be there to protect against loss if the legal snafu comes up. Legally, title insurance is optional, but it is the only option which is solely responsible to the new owner and the owner’s heirs for claims or encumbrances against the property’s title. While there is no guarantee the property can be kept, the buyer can be compensated for losses.
How It Works
Title insurance is a unique form of insurance. There is only one premium payment when the property is bought. This then covers the insured title for the life of the buyer and the buyer’s heirs. Many insurance policies are paid every year, but not this one.
Hidden Dangers
Whenever a property is sold there is a title search. These searches comb public records for liens and other information on the property to be sold. Some claims against property do not show up in these searches, but simply not finding them does not invalidate them. Fraudulent signing in the past, such as by a minor or married person who should not have signed for a sale, may cause the title to be invalidated and the ownership then becomes a matter for the courts. Encumbrances against the property which were not registered may also be a problem. Title insurance helps buyers and lenders deal with these issues.
Title insurance is an instrument to fight for legal protection of the title of the property against claims. While it does not guarantee a person might not lose their property the insurer will fight in court for a solution to keep the buyer from losing their property or their investment in the property. Opting out of title insurance means there is no coverage for these types of cases.
