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What is Title Insurance?
When you purchase a home, you will purchase several types of insurance coverage to protect your home and personal property. Homeowner's insurance protects against loss from fire, theft, or wind damage. Flood insurance protects against rising water. And a unique coverage known as title insurance protects against hidden title hazards that may threaten your financial investment in your home.
Protecting Your Largest Single Investment
Title insurance is not as well understood as other types of home insurance, but it is just as important. You see, when purchasing a home, instead of purchasing the actual building or land, you are really purchasing the title to the property - the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and even bring financial loss. Title insurance protects against these types of title hazards.
Other types of insurance that protect your home focus on possible future events and charge an annual premium. On the other hand, title insurance covers you against any illegal proceedings that have taken place in the past. Below are some examples:
- Unpaid property taxes
- Deeds, wills and trusts that contain improper wording or incorrect names
- Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
- Easements that allow construction of a road or utility line
- Pending legal action against the property that could affect a purchaser
- Incorrect notary acknowledgements
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