Have questions about title insurance? Here are a few answers for you.
Not everyone is familiar with title insurance and how it protects your real estate transaction. That’s understandable, especially for new homeowners who are purchasing a home for the first time. We’ve put together some of the most common title insurance questions that we’re often asked.
How Does Title Insurance Protect My Interests?
When someone buys a home, it’s assumed that it’s 100% owned by the current seller and that it’s free and clear. Although this is typically correct, it’s possible that the home could have claim against it. If this happens, your dream home may turn into a nightmare. Title insurance protects against financial loss that may come about due to these potential claims made against the property.
What Is a Title Search and What Does It Entail?
To safeguard against financial loss, a title insurance company will start a search of public records. Referred to as a title search, the goal is to uncover any existing issues. This process involves an on-site search of public records, a technical review of the documents, and a final inspection analysis to ensure that proper due diligence has been done. A title search covers all avenues, including the property itself, names associated with it, tax records, and more.
What Are the Most Common Title Issues?
The most likely problem that will crop up in a public record search is the existence of unpaid taxes, but there can be a variety of issues. A title insurance agent will search for evidence of fraud, forgery, missing heirs, mistakes on legal documents, contractor liens, etc. If any of these are found, you’ll be informed immediately. The title insurance you buy will protect you from financial loss stemming from these problems.
Does Title Insurance Cover All Pending Actions?
In most cases, title insurance covers what’s been found in a public record search, regardless of the details. Items that are not shown in public records aren’t covered. These include zoning and building restrictions, easements, rights of way (such as a community driveway), and certain other legal actions. These are quite rare and your title insurance agent will go over all of these items so you’ll understand what they can and cannot uncover.
Is Title Insurance Needed for a Newly Built Home?
We decided to put this title insurance question on our list, but the truth is that many people don’t ask it even though they should. Homeowners won’t even consider protecting their home against potential claims because it doesn’t exist yet. A title search will uncover any claims against the land, such as a situation where a landowner didn’t pay a subcontractor and a lien is in effect. Thankfully, most builders will automatically pay for/provide an owner’s title policy at closing.
When Are Title Problems Solved?
In most cases, a financial claim or any other problem with a property that’s covered by title insurance will be identified and resolved before the real estate transaction closes. A reputable insurance agency will be meticulous in their search, so you can be confident that an existing problem will be found. If nothing is discovered and a problem arises later, the title insurance will cover legal costs needed to protect the homeowner’s interests.
How Are Premiums Paid for Title Insurance?
When people think of an insurance premium, they understand that this is paid either monthly or for several months at a time. This is how most insurance works. Title insurance works differently because of the functionalities involved. Title insurance involves a one-time payment when the policy originates, yet it covers the entirety of ownership.
How Long Does Title Insurance Coverage Last?
One of the best things about title insurance is that once the contract has been signed and the payment has been made, you’re covered for as long as you have interest in the property. This means that if something was somehow missed in public record because it was mishandled and appears or perhaps a hidden heir comes out of the woodwork, you’re covered against financial loss. If you pass away, the title coverage will continue with their heirs. However, when you go to sell the property you will typically be required to purchase a new policy for your buyers.
Contact Marlin Title for Any Title Insurance Questions
Martin Title is the most respected and experienced title insurance company in the state of Florida. We are proud to serve Safety Harbor, Tampa Bay, Spring Hill, Pinellas County, and Hillsborough County. If you have any other title insurance questions or would like to receive a free quote, reach out to us at (727) 791-7000 today.