Why do you need Title Insurance?

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OCCOASTPROPERTIES reports on:

"Title Insurance"

 It's a term we hear and see

frequently -- we see reference to it in the Sunday

real estate section, in advertisements and in

conversations with real estate brokers. If you've

purchased a home before, you're probably familiar

with the benefits and procedures of title insurance.

But if this is your first home, you may wonder,

"Why do I need another insurance policy? It's just

one more bill to pay."

The answer is simple: The purchase of a home is

most likely one of the most expensive and

important purchases you will ever make. You, and

your mortgage lender, want to make sure that the

property is indeed yours —lock, stock and barrel

—and that no individual or government entity has

any right, lien, claim to your property.

Title insurance companies are in business to make

sure your rights and interests to the property are

clear, that transfer of title takes place efficiently

and correctly and that your interests as a

homebuyer are protected to the maximum degree.

Title insurance companies provide services to

buyers, sellers, real estate developers, builders,

mortgage lenders and others who have an interest

in a real estate transfer. Title companies routinely

issue two types of policies -- "owner's," which

cover you, the homebuyer; and "lender's," which

covers the bank, savings and loan or other lending

institution over the life of the loan. Both are issued

at the time of purchase for a modest, one-time

premium.

Before issuing a policy, however, the title

company performs an extensive search of relevant

public records to determine if anyone other than

you has an interest in the property. The search may

be performed by title company personnel using

either public records or more likely, information

gathered, reorganized and indexed in the

company's title "plant."

With such a thorough examination of records, any

title problems usually can be found and cleared up

prior to your purchase of the property. Once a title

policy is issued, if for some reason any claim which

is covered under your title policy is ever filed against

your property, the title company will pay the legal fee

involved in defense of your rights, as well as any

covered loss arising from a valid claim. That

protection, which is in effect as long as you or your

heirs own the property, is yours for a one-time

premium paid at the time of purchase.

The fact that title companies work to eliminate risks

before they develop makes the title insurance

decidedly different from other types of insurance you

may have purchased. Most forms of insurance

assume risks by providing financial protection

through a pooling of risks for losses arising from an

unforeseen event, say a fire, theft or accident. The

purpose of title insurance, on the other hand, is to

eliminate risks and prevent losses caused by defects

in title that happened in the past. Risks are examined

and mitigated before property changes hands.

This risk elimination has benefits to both you, the

homebuyer, and the title company: it minimizes the

chances adverse claims might be raised, and by so

doing reduces the number of claims that have to be

defended or satisfied. This keeps costs down for the

title company and your title premiums low.

Buying a home is a big step emotionally and

financially. With title insurance you are assured that

any valid claim against your property will be borne

by the title company, and that the odds of a claim

being filed are slim indeed. Isn't sleeping well at

night, knowing your home is yours, reason enough

for title insurance?

This article was published by the California Land

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Steve Mino & Natalie Vizir

Century 21

OCCOASTPROPERTIES.COM

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