Title insurance protects you from financial losses that could occur when the title to a property is not free and clear of defects. This insurance also protects you from the costs, attorney’s fees, and expenses of defending against a matter insured by the policy.

Title insurance provides protection and coverage for future claims or losses from title defects such as previous owner’s debt, liens, and other claims of ownership. It’s not as straightforward as car or health insurance, so here are a few examples of common title insurance claims:

• lines of equity are still open on the property

• fraud

• lost or forged deeds, satisfactions, or power of attorney

• claims of missing heirs or conflicting wills

• impersonation of someone

• inappropriate execution of the title or clerical errors

• contracts signed by minors or mentally Incompetent persons

• confusion of title resulting from similar names

• issues with the closing itself

• priority disputes due to foreclosure and/or bankruptcy

• tax and water bill errors

• etc.

There are certain risks that are not covered under a title insurance policy. For example, anything found during your property’s inspection.

A new construction home relieves a lot of uncertainty about a property’s title, however there are still risks associated with purchasing a new construction home. For example, if the home builder failed to pay subcontractors or suppliers, there could be a lien placed on the property.

This is actually negotiable. We’ve even seen the buyer and seller split the cost of title insurance. Both parties benefit from title insurance, but in most cases we see the buyer purchase the title insurance because their investment is at risk.