How does title insurance differ from other types of insurance?
Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults.
Another difference is that you pay a one-time premium. A title insurance policy will protect you from risks or undiscovered interests.
There are two principal forms of title insurance:
• The lender’s policy
• The owner’s policy
What is a lender’s policy?
A lender’s policy protects the mortgage holder. If there is a fault in title that results in a loss, the mortgage holder will be paid.
What does an owner’s policy provide?
• Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy.
• Payment of legal costs if the title insurer has to defend your title against a covered claim.
• Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.
How long does my coverage last?
Once purchased, title insurance remains in effect for as long as you own your property. Title insurance adds security and peace of mind to home ownership.
How Title Insurance Protects You?
If an insured claim is made against your property, the title company will defend your title in court at their expense. If a claim is judged as valid, the title company will bear the cost of settlement in order to perfect your title.
