Question:

Why is house title insurance important?

Answer:

Alright. How are you protected with house title insurance? There are two major types of title insurance coverage - lender title policy and owner title policy. The lender title policy is required on a real estate transaction such as purchase or refinance. The owner's policy is not obligatory but is strongly recommended to get one.

What is house title insurance?

Before any title insurance is issued, the title company will run a search in the public records - perhaps 40-50 years back in time - to seek anything that could affect the ownership of the property. More than 25% of the time title defects would be discovered arising from unpaid liens, mistaken will statements, deeds, etc. The title insurer will try to fix any discovered title issues before they issue the policy. The policy will protect the policy owner from defects arising from past recordings prior to signing the policy - with exceptions, explicitly stated on the policy.

Usually, for protection from title defects arisen after the date house title policy was signed, the policy owner will have to purchase additional title insurance coverage.

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