Real estate has traditionally been a family's most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one's ownership of real estate and the improvements located thereon. The owner, the owner's family, and the owner's heirs have rights or claims in and to the property that you are buying. Those who may have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, the Internal Revenue Service, or various other individuals or corporations. The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished. Title insurance gives you the assurance that possible clouds on title to the property you are purchasing, which can be discovered from the public records, have been called to your attention so that such defects can be corrected before you buy. Additionally, title insurance protects you from undiscovered claims that arise out of the past that threaten your ownership of the real estate. In the event such undiscovered claims arise, you will be reimbursed exactly as your title policy provides.

There are two types of title insurance. Lender's title insurance, also called a Loan Policy, and Owner's title insurance. Most lenders require a Loan Policy when they issue you a loan. The loan policy is usually based on the dollar amount of your loan. It protects the lender's interest in the property should a problem with title arise. The policy amount decreases each year and eventually disappears as the loan is paid off. Owner's title insurance is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts as long as you or your heirs have an interest in the property. Only Owner's title insurance fully protects the buyer should a problem arise with the title that was not uncovered during the title search. Title insurance includes protection from the following:

  • Undisclosed heirs;
  • Forged deeds, mortgages, wills, releases and other documents;
  • False impersonation of the true landowner;
  • Deeds by minors;
  • Documents executed by a revoked or expired Power of Attorney;
  • False affidavits of death or heirship;
  • Probate matters;
  • Fraud;
  • Deeds and wills by persons of unsound mind;
  • Conveyances by undisclosed divorced spouses;
  • Rights of divorced parties;
  • Deeds by persons falsely representing their marital status;
  • Adverse possession;
  • Defective acknowledgments due to improper or expired notarization;
  • Forfeitures of real property due to criminal acts;
  • Mistakes and omissions resulting in improper abstracting; and
  • Errors in tax records.