Of all the insurance products available to the consumer today title insurance may be one of the most unique and certainly one of the most necessary to property owners. Regardless of its necessity it remains widely misunderstood by most consumers. This guide is designed to answer some of the more common questions about title insurance.
Basically, it protects the insured from losses as the result of claims on one’s ownership of land. For instance, a seller may forge a signature of another, creating a loss for a new owner. Other problems that can occur include:
• improper court proceedings
• recording mistakes
• missing heirs
• unfiled liens
• incompetency of previous seller(s)
Title Insurance can protect you from all of these and more!!!
Probably one of the most comforting features of Title Insurance is the obligation of the insurer to defend you against claims of others. A neighbor may claim rights to a portion of your land. Without Title Insurance you would have to bear the cost of settling this dispute through the courts, regardless of the validity of the claim.
There are two basic forms of Title Insurance–an Owner’s Policy and a Loan Policy. As the names indicate, the Owner’s Policy covers the land owner and the Loan Policy covers the lender on a particular parcel of real estate.
A Loan Policy offers no protection to the land owner. A claim may arise that does not jeopardize the lender’s interest, but may, in fact, cause a great loss to the owner. An example would be the one outlined earlier, when a neighbor claims rights in your land.
In a word…forever. You and your heirs are protected for as long as you or your heirs own the property.
Fees vary from state-to-state, but in all cases it is a one time cost that doesn’t have to be renewed like other forms of insurance.
The first Title Insurance Policy was issued in 1878 in Philadelphia, Pennsylvania.
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Next we can take a look at the different ways to hold title in PA.