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Title
Insurance definition – title insurance insures the
status of the state of title to a specific parcel of real
property. In exchange for a premium paid, title insurance
companies assume the risk that title to a parcel of real
estate is as it is stated to be in the policy. A title
insurance policy indemnifies the buyer or lender against
losses suffered if title to the property is not as the
policy states it to be.
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What is the need for title insurance?
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Title insurance provides protections against such unforeseen
elements as claims against the title of your home that
weren't revealed during the title search. Most title hazards
will show up during a title company's investigation of
public records, but even the most exhaustive search may not
bring all problems to light. Title insurance is written to
provide protection against most undisclosed risks. Other
factors that are researched are:
- Easements of record
- Restrictions, covenants, and
conditions
- Verification of legal description
- Liens or judgments
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What are some examples?
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One
example would be a claim by a missing heir or a previous
owner. Other possible claims can include liens by
laborers for unpaid work, a deed conveyed by a married
person purporting to be single, boundary disputes, or forged
deeds. When claims are made, the title insurance
company is responsible for satisfying legitimate insured
claims or for defending the interests of the policy holder
in court. |
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Are different kinds of title policies available?
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Yes, and
generally there are two forms. The first is lender's
title insurance. It is usually written in the amount
of the home loan and protects the lending institution from
losses resulting from defective titles. Lending
institutions often will refuse to make a loan unless a
lender's policy is purchased. Because lender's
insurance expires when the mortgage loan is repaid, it does
not protect the home buyer from title defects. For
this, you need a form of title insurance called an owner's
policy. It usually is written in the amount of the
real estate purchase price. Coverage continues as long
as a property owner, his heirs, or persons to whom he may
bequeath it, retain an interest in the property. |
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Compliments of
Kevin A. Snow
www.SnowSellsScottsdale.com
480.773.0557 |
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