What is Title Insurance?

What is Title Insurance? Title insurance is purchased when buying and selling a house. By purchasing title insurance, you can protect your rights and interests when the property...

Title insurance is purchased when buying and selling a house. By purchasing title insurance, you can protect your rights and interests when there is a problem with the title. Why are there problems with the property rights of real estate? There are several reasons: Defects in the chain of Title may not have been handled properly during the transfer of property rights, the property may have had unpaid mortgages, liens, or easements. The so-called easements refer to the rights that the land owner can exercise over other people's land. Some of these property rights problems are not easy to detect, such as: fraud, errors in property transfer procedures, etc. Some are easier to detect, but it is not easy or impossible to remove them, such as: being seized, having an easement, etc.

Title insurance is basically the same as general insurance. It is a contract between the insurance company and the insured. When the insured suffers a loss, the insurance company will compensate the insured in accordance with the terms of the contract. However, the biggest difference with title insurance is that it usually only protects problems that existed before the insurance contract was entered into. Unlike general insurance, it protects problems that occur after the contract takes effect.

Therefore, title insurance is to protect real estate buyers from suffering losses due to the purchase of real estate with questionable title. If you buy real estate with a loan, the lending bank will also require you to purchase title insurance in order to protect its own rights and interests. Therefore, there are two types of title insurance. One is the owner’s policy, which protects your rights and interests. The seller usually pays the premium, and the other is the bank policy (Lender’s policy). Policy), in order to protect the interests of the bank, the lender traditionally pays the premium, which can be regarded as part of the loan fee.

The above briefly explains the importance of title insurance. If you have any questions about real estate, you are very welcome to call my hotline (480) 612-4545 or email to Rich@RichLiao.com