Title Insurance Protection
Title insurance is indeed designed to protect homeowners and lenders from potential issues related to the title of a property. When you purchase a title insurance policy, the title company conducts a thorough examination of public records to identify any potential problems with the property’s title. These issues could include:
- Liens and Encumbrances: Unpaid debts or claims against the property that could affect your ownership rights.
- Errors in Public Records: Mistakes or inaccuracies in public records that could impact the title.
- Forgery or Fraud: Instances where someone fraudulently conveys the property or forges signatures in the chain of title.
- Undiscovered Will or Heirs: Potential conflicts regarding inheritance or wills that may affect ownership rights.
- Boundary Disputes: Disputes with neighbors or incorrect property boundaries.
If any of these issues arise after the purchase, the title insurance policy provides coverage and financial protection. It typically covers legal fees, losses, or damages incurred due to covered title defects. It’s important to note that there are different types of title insurance policies, including owner’s title insurance and lender’s title insurance, each serving different purposes in the real estate transaction.