Title insurance is different from other property insurance policies in many ways. Most property insurance policies protect the owner against loss or damage due to fire, theft, vandalism, lightning and other mishaps. Title insurance, on the other hand, protects the owner against hidden title hazards that include title defects and liens. It protects the ownership of the property as long as one owns it.
Insures past events
Title insurance and other property insurance policies are beneficial to people who are buying real estate property. Other property insurance policies protect the insurer against future losses arising out of some unwanted events – natural or man-made calamities. Title insurance, on the other hand, protects the insurer against hidden title hazards that include mistakes in land records; forgery, undisclosed heirs, title defects and liens.
It provides financial protection to the property by covering unforeseen issues. It is an outcome of a search, examination and clearing of your title, to ensure that the financial investment in the property is not at risk. A professional title company will not only help identify the flaws, but will also help find a solution for it.
Protects both owners and lenders
It benefits both the owner and the lender. As it offers two different policies for them – Owner’s insurance and Lender’s insurance. It protects their investment in the property against any deficiencies on the title.
Unlike other property insurance policies where one needs to pay annual or monthly premiums, title insurance is one-time premium. With one premium, this policy covers many issues including unknown title defects, existing liens against the property’s title, encroachment issues, title fraud and errors in surveys and public records.
In addition, title insurance provides coverage as long as the owner or his heirs own the property. It offers a great value for money as the cost of title insurance is significantly lesser than other property insurance policies.