Title Insurance, Simply Put...
Title to your property gives you the legal right to ownership. Title insurance is financial protection against a loss arising from a defect in your title. Although a title search is conducted prior to the issuance of title insurance, there is no way to predict with 100% assurance that a title will not be disputed. The title insurer, however, will defend a future challenge or interest in the property, and the title company will bear all costs of such defense. In other words, title insurance is an indemnity contract, protecting the insured against loss or damage up to the amount of their policy.
Two Types of Title Insurance
Simply put, there are two types of title insurance that are most commonly issued in a residential transaction.
A lender's title insurance policy insures the priority of their lien. It protects the outstanding balance of their mortgage.
An owner's title insurance policy protects the interest of the homeowner. This policy will protect your interest and will cover your loss arising from a valid claim up to the face amount of the policy and all the defense cost. This is a one time premium and offers protection for as long as you or your heirs own the property. This is coverage that I recommend as it insures the future as well as the past!Tom Haberman Edina Realty
