Why Do You Need Title Insurance?

Buying a home is one of the largest if not the largest investment many people will make in their lifetime. A person should want to make this investment secure by protecting the basic proof of ownership. Title Insurance is the best way to accomplish this.

A title is the evidence that a person has ownership and possession of land. There are many problems that can make a title defective. These “defects” can remain undisclosed even after the most thorough search of public records. This can be dangerous because you may not learn of them for many months or even years. However, such defects could force you to spend substantial amounts on a legal defense and still result in the loss of your property.

Title Insurance is a means of protecting yourself from financial loss in the event that these problems arise. Not only does it protect from financial loss, but title insurance also pays the cost of defending against any covered claim.

You may think that the Title Insurance that covers the lender covers you as well. This is not necessarily true. There are two types of Title Insurance. A Lender’s Policy, which is required by your lender, only insures that the financial institution has a valid, enforceable lien on the property. Unlike the Lender’s Policy, the Owner’s Policy protects you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner’s title policy covers the full cost of any legal defense of your title.

112 South Egan Ave. - PO Box 263 - Madison, SD 57042
Phone: (605)256-4640 Fax: (605)256-3835 Email: info@weberabstract.com