Insurance is a common phenomenon these days, providing financial protection against possible loss of money, property or business in exchange of a regular payment called premium.
Title is a legal term that stands for a formal document that stands as a proof for one’s ownership in a property. Conveyance of the document may be required to affect a transfer of property from one person to another. Title is a simple enough concept. But it can go awry, if there arouse an ownership issue. This is where title insurance could lend a helping hand. Title insurance can cost a few thousand dollars, but it could shield the insured if any problem arises.
Title insurance covers the owner of an interest in real property in the event of any actual or anticipated (threatened) financial loss. It shields the insured from any financial loss, at any time of his owning the property concerned, in the event of another person claiming that he/she has partial or full ownership over the property.
Title insurance ensures that the title is marketable when one purchases a real estate property. But before providing the insurance cover, as soon as you apply for title insurance, the insurance company thoroughly researches the title to see if everything is in place. That is, if the seller had transferred the title truly and there is no other person to claim the ownership. The scenario might appear to be simple, but if over looked, it can cause all sort of problems at a later date.
Title issues commonly crop up in situations such as,
- In the case of divorcing couples. Divorce can turn ugly sometimes. Imagine a situation in which one of the partners attempting to sell off the property without the other person’s knowledge or consent. For the owner to gain clear title, the property needs to be signed off by both the partners in marriage. Otherwise, the new owner will forced to become a party in the divorce proceedings.
- If the property is bought on an estate sale, and there is an ongoing tussle in the owner’s family where the heirs are not be going on well, there is every chance that the property is being sold without including all the heirs and one of the heirs later filing a law suit questioning the transaction.
- Ingress and Egress issues
These are not the end of potential instances that are possible but few examples. The problems that borne out of dispute of title is best to be avoided. Therefore it is prudent to apply for title insurance when you decide to buy a home or land.