Homeowner’s Insurance versus Title Insurance

Homeowner’s Insurance versus Title Insurance

Most home buyers are familiar with homeowner’s insurance, but not as familiar with title insurance. When purchasing a home, you will need both. Below we have outlined the differences between the two. Protection Homeowner’s insurance will protect you against loss or damage to the home while you are the owner. Title insurance protects ownership interests in the real property. Homeowner’s insurance will protect you against future losses that might occur during the policy period while title insurance protects you against events that occurred before. Payment With homeowner’s insurance, a premium is paid annually for each year you own the home. With title insurance, a premium is paid once and is due at the time of purchase of your home. With homeowner’s insurance, the premium is competitively priced whereas with title insurance, the premium is filed with the state and all insurers charge the same...
Title Insurance – What is it?

Title Insurance – What is it?

There are so many things to consider when purchasing your home and if you are a first time buyer purchasing a home from a previous owner, you will want to add title insurance to your list. But what is title insurance? Title insurance is your protection against any unwanted baggage from the previous owners of your home. This can include back taxes, undisclosed liens, legal judgments against the former owners, or any type of fraud. Essentially, title insurance is like home insurance only instead of protecting you from issues that may occur while you own the home, this is to protect you from anything that may have occurred before. Legal defense and settlement costs would be paid for by the title insurance company if a future claim is ever made against the home. To obtain title insurance, you will typically allow your attorney to order it on your behalf when you sign your sale contract....
How to protect yourself against title errors and defects.

How to protect yourself against title errors and defects.

Most likely, the property you are purchasing has a history. In some cases, the property’s history can have errors or defects that can affect your home purchase. A title search is conducted to find these errors and have them corrected as quickly as possible. There are a few different types of errors that could affect your purchase. One of the most common, is a clerical or filing error. For example, there could be an inaccurate description of your property. This type of discrepancy could cause issues in receiving the needed loan amount which in turn would affect your ability to purchase your home. Filing errors also occur with respect to legal documents, pending legal action or unreleased mortgages that were not properly filed for public records. All of these could result in unnecessary stress and additional costs. In order to make sure your home title is clean and there are no errors, a title search is conducted. The title search process includes an examination of all documents associated with the property you are purchasing and will include judgments, street and sewer assessments, special taxes and assessments. They are examined by the office of recorders or register of deeds, clerk of courts and other municipal and county officials. While there is no way to completely avoid errors and mistakes, having an owner’s policy and title insurance will help protect your ownership rights from errors and defects found in public records. Both your legal costs and certain losses that you sustained as a result of an error with your title may be covered by title...