Why Do You Need Title Insurance?

We hear and see the term ‘title insurance’ frequently. We see a reference to this term in advertisements, in the Sunday real estate section, and in conversations with real estate brokers. You’re probably familiar with the benefits and procedures of title insurance if you’ve purchased a home before. However, if this is the first time you are buying a home, you may wonder why you need this type of insurance.

The home purchase is one of the most expensive and important purchases you will ever make. So, you and your mortgage lender want to make sure that the property is indeed yours and that no individual or government entity has any right, lien claim to your property.

Title insurance companies, as Riverside Abstract, are operating in order to make sure that the homebuyer’s rights and interests to the property are clear and that the title transfer takes place efficiently and correctly.

The New York-based title insurance agency, Riverside Abstract, is providing services to everyone who has an interest in a real estate transfer, such as buyers, sellers, real estate developers, builders, mortgage lenders.

Routinely, two types of policies are issued by title insurance agencies, an owner’s policy and a lender’s policy.

The owner’s policy covers the homebuyer and the lender’s cover’s bank savings and loan or other lending institution over the life of the loan. Both policies are issued during the purchase for a modest, one-time premium.

Before the policy is being issued, an extensive search of relevant public records is being performed by the title company, to determine if anyone other than you has an interest in the property.

The title company personnel perform the search, using the public records or more likely, information gathered, reorganized and indexed in the company’s title plant.

According to agents from Riverside Abstract, any title problems usually can be found and cleared up prior to the property purchase.

If for some reason any claim which is covered under your title policy is ever filed against your property, the legal fee involved in defense of your rights, as well as any covered loss arising from a valid claim, will be paid by the title company.

The title insurance lasts as long as you or your heirs own the property and it is available for a one-time premium paid at the time of purchase.

Title companies work to eliminate risks before they develop. This makes the title insurance absolutely different from other types of insurance.

Unlike other types of insurance, which provide financial protection against an unforeseen event, title insurance’s purpose is to eliminate risks and prevent losses caused by defects in the title that happened in the past. Once the title insurance is issued, risks are examined and mitigated before property changes hands.

Both, the home buyer and the title company obtain benefits from the risk elimination. It minimizes the possibilities adverse claims might be raised. By doing so, it reduces the number of claims that have to be defended or satisfied. By this, costs are kept down for the title company and your title premiums low.

Home buying is a big emotional and financial step. Agents from Riverside Abstract claim that title insurance assures that any valid claim against your property will be borne by the title company and that the odds of a claim being filed are slim indeed.