Buying a home is an important investment. Title Insurance is what protects the buyer's financial interest in their home from loss associated with title defects, liens, and other such matters. It is the most effective, most accepted, and least expensive way to protect a buyer's home ownership investment. When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from undisclosed liens not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights.
Throughout the years, your new property may have changed hands many times through sale, inheritance, foreclosure or bankruptcy. Each transfer was an opportunity for an error in the chain of title to arise. If an error occurred and has never come to light, it puts the title to your property in jeopardy.
Even though our team at Bluegrass Land Title has provided a very thorough title search, an Owners title insurance policy will give additional protection. Here are a few of the more common title claims that could affect your property:
- Forgery and impersonation
- Lack of competency, capacity or legal authority of a party
- Mistakes in recording of legal documents
- Undisclosed or missing heirs
- Erroneous or inadequate legal descriptions Misrepresentation of marital status
- Undisclosed but recorded federal or state tax lien
- Undisclosed but recorded prior Mortgage
- Clerical errors in public records Wills not probated
- Invalid Divorces Unpaid Taxes
- Unpaid but non recorded Home Owners Association Liens
What does it cost?
Because it is a highly regulated industry, title insurance policy types and costs will vary from state to state. You can check with the state’s Department of Insurance for more information on pricing regulations. In general, each policy price is based on the purchase amount of the home (for an owner’s policy) or the total amount of the loan (for a lenders policy). Please call our office for a quote based on your specific transaction.
Length of Coverage.
Also, unlike other types of insurance, the purchase of an owner’s title insurance policy is a one-time event: there are not future premiums to pay as long as the homeowner or their heirs hold an interest in the property. That means that this fee, generally paid when the buyer purchases the property, will protect the homeowner and their family indefinitely for so long as they hold an interest in the property. On a refinance, your lender will likely require the homeowner to purchase a new loan policy, as this type of insurance protects the lending institution only for the life of the loan. The owner’s policy, however, will remain effective.