Step 7

Title Insurance

Importance of the title company:

  • Performs title search
  • Insures against title defects
  • Collects and stores title information in Title Plant
  • Provides escrow (closing, recording and dispersing of funds)
  • Issues title policies for both buyer and seller

Selling a home without a title insurance is worse than swimming with hungry sharks!

Real estate ownership insurance, or “Title Insurance” as it is commonly called, is an insured statement of the condition of title or ownership of a particular piece of property. It protects lenders or homeowners against loss of their interest in the property in the case of a legal defect in the title.

Title defects usually occur before the date of the policy and remain undisclosed until sometime later. Although a through thorough search of the public records is performed prior to issuing the policy, hidden hazards or defects can sometimes go undetected.

A few examples of hidden defects include: forged documents, deeds by minors, undisclosed heirs, deeds of persons apparently single but actually married, federal estate and/or gift tax liens against the property, errors in tax records, etc.

Title insurance differs from other types of insurance in that the primary purpose of title insurance is to eliminate potential risks and prevent losses caused by defects arising out of past events. The function of most other types of insurance is to provide financial compensation for losses stemming from unforeseen future events such as accidents, injury, and death.

Basically, a title insurance policy is a contract guaranteeing that the title to real property is as reported. It assures that under the terms of the policy, the Title Company will defend the title against claims by others up to the value of the policy and will bear the expense of the defense and will pay any losses that occur through settlement or under court order.

Please use the form below for any questions you may have.

[ninja_form id=6]

April 2025

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