If you have purchased or refinanced a home, you likely bought buy title insurance. So what exactly does title insurance cover and who does it protect?
In short, title insurance protects against problems affecting the title to your home. You may think having a serious problem with your title is unlikely, but title companies find problems in about 25 percent of their title searches liens against the property from unpaid subcontractors, unpaid property, or income taxes, and judgment holders. Other issues that are not easy to detect include forged signatures in the chain of title, recording errors, undisclosed easements, and title claims by missing heirs or former spouses.
There are two types of title insurance: an owner’s policy and a lender’s policy. When you obtain a new loan, the lender will require you to purchase a lender’s policy. A lender’s policy protects the lender’s interest in the property should a problem arise. Owner’s title insurance is optional, but it protects the homeowner by paying claims and legal fees should a problem arise. Owner’s title insurance is purchased for a one-time fee at the original purchase and provides coverage for as long as you own an interest in the property or provide financing for a subsequent buyer. It also covers any liabilities you have under the title warranties you make when you sell the property.
As part of the coverage of a title policy, the insurance company will pay all legal fees to protect the rights of the insured (the buyer or the lender) for the property. A title policy is protection against loss of your rights to the property. Considering that your home is probably your most valuable asset and biggest investment, title insurance makes financial sense.
The Gibson Law Group is proud to affiliate with Allegiance Title Company in its commitment to provide exceptional customer service. Our title office is located at 1550 Norwood Dr., Ste. 402 in Hurst. Our phone number is (817) 554-1778. We would be honored to insure your next purchase or sale.