Tucked in among all your other closing costs when you buy a house you'll probably find a charge for "title insurance". If you're taking out a mortgage to buy a house, your lender will insist that you take out title insurance. This is more than just one more nuisance charge levied by people who are determined to make a few extra bucks on your home purchase. Title insurance offers you some real, tangible security in the event that there's ever a problem with the title to your home.
But I thought that's what the title search was for...
When you agree to buy a house, you want to be sure that the person selling it to you actually has the legal right sell it. The information about who has rights of ownership to a piece of property may be scattered in all sorts of different places. The way that you find out who can buy and sell the property is to hire an experienced researcher who understands all the things that can affect the transfer of a title from one owner to the next.
Because the information is so scattered, though, there is always the chance that some little bit of information might not be recorded or found.
Really, though, what could go wrong with a title?
Let's just say, you'd be amazed. We've heard stories that range from the bigamist's first wife having a claim on the house to the fast-talking con artist who forged ID papers and sold a family's home while they were on vacation. Most title disputes have far more boring causes - an old homeowner's loan that wasn't paid off, a clerk's mistake in filing a document or a dispute arising from a mismarked property line.
So what does title insurance cover?
When you take out title insurance, the insuring company will do a full search of the title records to be sure that they are free and clear, but there's always the possibility that they missed something. If they did, they promise to pay any costs arising from the title challenge and to reimburse you for any losses you incur because of it. In other words, if someone does show up with a claim against your deed, the insurance company will pay the legal costs of defending against the claim. If you lose, they will pay off the cost of the house.
Okay, so what's with the "lenders insurance" and "buyers insurance"?
There are two kinds of title insurance. Mortgage lenders require only that you buy "lenders insurance" because they're looking out for THEIR interests, not yours. In the event that a successful claim is made against your ownership of your house, lenders insurance will pay them any money outstanding on your mortgage. You, however, are out any money that you've already paid on the house, including your down payments.
Owners insurance covers the entire purchase price of the house. If there is a claim against the property, the insurance company will reimburse you any money that you've already paid toward your mortgage and pay off the remainder of the mortgage so that you're not liable for continuing to make the payments on a house that you don't own.
How do I pay for title insurance?
You'll pay for title insurance as part of the closing costs of your house. It's a one time premium that will cover you for as long as you own your home, as long as the claim arises from something that happened before the title search was done. There are no monthly payments - pay once, and you don't have to worry about it again.
It's worth it, wouldn't you say?
Listed below are more articles related to the above article from the "Insurance" article category.
People interested in the above article "What Do You Mean It's Not My House? - Why Title Insurance Is More Than Just Another Good Idea" are also interested in the related articles listed below:
Accidents at work cannot be avoided no matter how much effort is made to avoid them. Companies that take the proper safety precautions to protect workers reduce the risk of potential problems. When accidents happen, accident claims can be submitted by workers looking for a way to get compensation for an injury. This article will discuss the potential accidents that may happen at work and how companies should properly prepare.
Payment Protection Insurance, commonly abbreviated as PPI, is an insurance coverage package, meant to cover outstanding loans, overdrafts and other forms of debt. This insurance cover is usually an add-on product that is included in the final computation of overdrafts and loans. The primary purpose of this product is to protect the borrower, from circumstances that are beyond their control, which may prevent them from servicing their debt. Such circumstances include loss of employment, ailments, accidents, or death.
Personal injury claims are usually made by people that have been injured in an accident. Accidents can happen in many places but the common one that people suffer from are usually at work or when driving. Potential problems are always waiting to happen, especially when we drive. There are a number of possible crash situations that we should always be aware of. This article will discuss the different causes of road accidents.
Insurance is a threat management technique. Auto insurance also called as vehicle insurance. The main purpose is to protect against financial protection against physical damage or bodily injuries which results from collisions. A personal accident insurance policy is an insurance contract that covers risk arising from accidents, be it at home, or outside. By investing in Accident Insurance, you can protect your family and yourself from the financial concerns such as loss of income and medical expenses that unforeseen accidents lead to. It is contracts that arise from accidents at home or at road. When investing in this plan anyone can protect his or family from the losses or medical expenses.
Landlords have to cope with a lot more than other property owners. Since they are responsible for the upkeep of their property, they share the fears of something going wrong that their own tenants do. But a specially designed insurance policy provides better cover. This article looks at the let property insurance policy and how it offers landlords the protection that they need.
The bereavement of one of the main participants in a wedding can cause a serious problem and even enforced cancellation. However unthinkable this may seem, you would be well advised to take out some form of wedding insurance to cover this eventuality.
Wedding insurance can protect you financially in case your wedding photos cannot be printed. Wedding photos are perhaps the most important memory you will have from your wedding day, so it is essential that your wedding photographs are protected by wedding insurance. Your wedding photographer may not be able to print your wedding photographs if the film, negatives or digital media used becomes damaged or lost. Whilst any reputable photographer should make back up copies of the photographs he or she takes at your wedding, you may find that you're unlucky enough to lose your precious wedding photographs.
