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Q: WHY DO I NEED TITLE
INSURANCE?
IA: When
you buy a home, or any property for that matter, you expect to
enjoy certain benefits from ownership. For example you expect to
be able to occupy and use the property as you wish, to be free
from debts or obligations not created or agreed to by you, and
to be able to freely sell or pledge as security for a loan.
Title insurance is designed to cover these rights you bargain
for.
Q: WHAT IF
I HAVE A PROBLEM? DO I HAVE TO LOSE MY PROPERTY TO MAKE A CLAIM?
A: Not at all. At the mere hint of a claim adverse to your
title, you should contact your title insurer or the agent who
issued your policy. Title insurance inculdes coverage for legal
expences which may be necessary to investigate, litigate or
settle an adverse claim.
Q: WHAT DOES THIS COST?
A: The cost varies, depending on
the value of your property. The important thing to remember is
that you only pay once, then the coverage continues in effect
for so long as you have an intrest in covered property. If you
should die, the coverage automatically continues for the benefit
of your heirs. If you sell your property, giving warranties of
title to your buyer your coverage continues to protect your
security intrest in the property.
Q: IF MY LENDER GETS TITLE INSURANCE
FOR ITS MORTGAGE, WHY DO I NEED A SEPARATE POLICE FOR MYSELF?
A: The lender's policy covers only
the amount of it loan, which is usually not the full property
value. In the event of an adverse claim, the lender would
ordinarily not be concerned unless its loan became
non-performing and the claim threatened the lender's ability to
foreclose and recover its principal and intrest. And, in the
event of a claim there is no provision for payment of legal
expences for an uninsured party. When a loan policy is being
issued, the small additional expense of an owner's policy is a
bargain.
Q: CAN YOU BE A LITTLE MORE SPECIFIC
ABOUT THE TYPES OF CLAIMS, OR RISKS, COVERED BY TITLE INSURANCE?
A: Sure. Standard coverage handles
such risks as:
1. Forgery and impersonation;
2. Lack of competency, capacity or legal suthority of a party;
3. Deed not joined in by a necessary party (co-owner, heir, spouce,
corporate officer, or business parter);
4. Undisclosed (but recorded) prior mortgage or lien;
5. Undisclosed (but recorded) easement or use restriction;
6. Erroneous or inadequate legal descriptions;
7. Lack of a right of access; and
8. Deed not properly recorded.
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