How TITLE INSURANCE differs
Unlike other forms of insurance, title insurance focuses on loss prevention through extensive upfront analysis of title issues, providing peace of mind to policyholders with a one-time payment, whereas other insurances rely on loss assumption and require ongoing premiums.
How Title Insurance Differs From Other Forms of Insurance
Unlike other forms of insurance, title insurance emphasizes loss prevention for the insured. Title professionals perform labor-intensive work to find and address title issues that could threaten your homeownership. This upfront analysis gives you, as a policy holder, the peace of mind that your title risk has been effectively reduced. In contrast, insurance based on loss assumption (such as auto or property and casualty insurance) requires little upfront work because claims cannot be predicted or prevented, and premium funds are needed only in the event of an accident or other covered issue. These types of insurance also require annual coverage payments, unlike title insurance which is paid for only once upon the purchase of your home or establishment of a new mortgage.
The Importance of Title Protection
There are many title issues that could cause you to lose your real property or your mortgage investment. Even the most careful search of public records may not disclose the most dangerous threat: hidden risks. These issues may not be uncovered until years later. Without title insurance from a reputable and financially solvent company, the ownership of your home could be jeopardized.
Here are some examples of title issues that may occur:
Deeds by persons supposedly single, but secretly married
Deeds in lieu of foreclosure given under duress
Marital rights of spouse purportedly, but not legally, divorced
Impersonation of the true owner of the land
Deeds by minors
Deeds by persons of unsound mind
Deeds to or from defunct corporations
Defective acknowledgments by notaries
Duress in execution of instrument
Erroneous reports furnished by tax officials
Forged deeds, releases, etc.
Mistakes in recording legal documents
Surviving children omitted from will
Administration of estate of persons absent but not deceased
Birth or adoption of children after date of will
Claims of creditors against real property sold by heirs or devisees
Deed of community property recited to be separate property
Deeds by foreign parties