What is Title Insurance & Why is it Important?
As real estate is the nation’s largest market, its purchase and sale is essential to the health of the U.S. economy. However, these transactions are never without risk. That’s why title insurance has been protecting American homeowners for more than 130 years.
Tim and Debra Galli have been married for 28 years and have been working together as a team in the title insurance industry for 25 years. Their primary focus is assisting agents, sellers and buyers in successfully closing their Real Estate transactions. Through their time in the industry Tim and Debra have experienced many different Real Estate cycles and have always quickly transitioned to be the leaders in their field. This is done through an incredible dedication to the business and to each and every client they serve. Their professionalism and service is highly respected in the office and in the field. They have a tireless commitment to their clients and their transactions!
When a piece of real property is financed, purchased or sold, a record of that transaction is generally filed in public archives. Likewise, other events that may affect the ownership of a property are also documented and filed. These may include liens, levies, encumbrances, etc. When a buyer purchases title insurance, the title company searches these records to find (and remedy, if possible) issues that may affect the purchaser’s ownership.
Title Search and Exam
That’s where title insurance differs from traditional insurance models. When you purchase a policy insuring you for matters relating to your car or health, the insurance company assesses the risk of insuring you, and bases its premium on the risk being assumed. With title insurance, the insurer first works to identify the status of ownership, liens and other matters affecting title by collecting documents affecting title from the public records that are statutorily identified for the recording of real estate transactions. This process is called the search. Once the search is complete, the title insurance underwriter can then determine the insurability of the title and list exceptions from coverage and requirements to insure.
Of course, even the most skilled title professionals may not find all title problems. Other risks include matters that are more difficult to identify, such as title issues resulting from filing errors, forgeries, undisclosed heirs, and other unforeseen problems. That’s one reason why your title insurance policy can play a key role in protecting your real estate investment.
When you purchase a new home or other piece of real property by securing a mortgage, you will be required by your lender to purchase a loan policy of title insurance. This policy insures the lender against covered title defects up to the amount of insurance. This coverage in favor of the lender lasts for the life of the loan under limited circumstances stated within the policy
You will also have the option of purchasing an owner’s policy of title insurance, which provides insurance directly to the insured owner listed in the policy, and describes the type of real property interest owned. The insurance in both an owner’s and a loan policy is subject to the policy provisions, which include the covered risks, exclusions from coverage, the conditions and the exceptions to title listed on a schedule to the policy.
You will pay a one-time premium for both the loan policy and the owner’s policy at the close of your transaction, based on the total value of your home and the amount of your loan. This is another way in which title insurance differs from other insurance models, where premiums are paid on an ongoing basis. The purchase of a home or other real estate may be the largest financial investment you ever make. Title insurance can give you added peace of mind in knowing that the title to your investment is insured.
Why Every Homeowner Needs an Owner’s Policy
Title Insurance protects the insured against covered title defects affecting the insured property. When you buy a home, you expect to enjoy important property rights. For example, you likely expect to be able to occupy the property, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell your property or pledge it as security for a loan. Title insurance is designed to protect these important property rights. Here are seven reasons you should purchase an owner’s policy of title insurance.
Buying a home is a big investment. For a one-time premium, an owner’s title insurance policy helps protect it.
The seller may not own the home or have authority to sell it. Title insurance offers coverage against defects in title caused by fraud, forgery, incapacity, impersonation or the seller’s lack of authority to sell the property.
Warranties in your deed may not guarantee your ownership of the home. Even if the seller warrants good title to you in the deed, the seller may not have the money to pay your losses if a problem arises. When you purchase an owner’s title policy from First American, you have the financial power of First American to protect you against loss from covered claims.
The policy may cover more than just ownership. Depending on the type of policy issued, coverage insuring against loss due to disputes over boundaries, access rights and easements may be provided to you. Ask about available options for extended or expanded coverage.
A lender’s title policy does not cover you. Your lender has required you to pay for a lender’s title insurance policy, but that policy only provides insurance to the lender. A homeowner is not covered, and cannot make a claim, under a lender’s policy of title insurance.
The high cost of claims. Title disputes are not cheap. Are you prepared to pay a lawyer to fight for you in court? Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle an adverse claim.
Coverage for a one-time premium. The premium for an owner’s policy of title insurance is only paid once and covers you for as long as you hold an interest in the title to your home. The coverage automatically continues for the benefit of your heirs as well.
You’ve worked hard for your home. Protect your important property rights by obtaining an owner’s title insurance policy from First American Title.
As with any insurance contract, the insuring provisions express the coverage afforded by the title insurance policy and there are exceptions, exclusions and conditions to coverage that limit or narrow the coverage afforded by the policy. Also, some coverage may not be available in a particular area or transaction due to legal, regulatory, or underwriting considerations.
First American Title Company
Tim and Debra Galli
I’m proud to represent First American Title and I am committed to provide you with superior service along with the very best products and services in the business. Please contact me today to learn more about how First American can work for you. [/member]
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