Title Insurance Protects Your Biggest Investment

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The biggest investment you will make in your life will likely be the purchase of a home. So before you close, you need to know that nobody else can claim the property.

A title insurance company ensures that your new home won't surprise you with expensive encumbrances and other legal obstacles.

For a modest, one-time title insurance premium, you will receive continuous title insurance protection equal to the purchase price of the property or its current market value.

The title company performs an extensive search on the title history of the property. The title insurance company can usually identify any title problems and clear up these problems before you close on the property.

Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem selling your property. Your title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise. Title insurance usually covers:

  • Contested title — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. If this happens, the title insurance company will defend the title at no expense to you.
  • Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Any number of other complex problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company misses them.

At Ashok Lakshmanan, we answer questions about this process every day. Give us a call: 630-717-3600.


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