The title is a term referring to the right of ownership to land. When you purchase a home, the title is transferred to the new home owner (you) from the old home owner, who you bought the place from.
What is title insurance?
This type of insurance policy protects the home owner against challenges to the ownership of the home or from any problems related to the title of the home. You will receive coverage against losses due to defects in the process of transferring the title, even if the defect existed before you made your purchase.
A title defect is a problem with the title that prevents you from officially owning the home. Unpaid liens and encroachments from neighboring properties are two examples of such defects. A title insurance policy will keep you protected for as long as you are the owner of the property.
A list of risks that are covered by title insurance:
– Fraud and forgery, including when your title is taken through those means
– Encroachments that would be disclosed on an updated survey
– Easements, or the right acquired for access to or over another person’s property for a specific purpose, such as public utilities
– Zoning non-compliance, which occurs when the property does not meet local by-laws
– Someone other than the owner having interest in the home, such as a previous owner of the property not being purged from the title
This type of insurance is usually purchased when you buy your home or when you refinance it, but it can be bought any time after you’ve got the keys in your hand. There will be only one premium payment to make when you first purchase the insurance. A title insurer can tell you how to purchase the policy.
Do I need title insurance?
You should discuss the function of title insurance with your real estate lawyer or notary to see if a title insurance policy is right for you and your situation.
The benefits of title insurance
1) High-quality coverage
The policy can provide a broad range of coverage, including coverage against post-purchase fraud.
2) Resting easy
You can relax when you know that any defects impacting the title of your home are covered by the insurance policy. Your title insurer will fix the problem for you.
3) A one-time cost
The premium is typically to be paid at the time of closing for either purchases or refinances. Some insurers will let you purchase this insurance at any time.