Apr 12, 2021
If you have bought a home before, you are probably familiar with the benefits and procedures of title insurance. On the other hand, if you are buying a home for the first time, you might wonder why do you need a title insurance policy.
Experts from title insurance company, Riverside Abstract answer this question:”Buying a home is probably one of the most expensive and important you will ever make. Both you and the mortgage lender will want to make sure that the property is truly yours - entirely - and that no person or government entity has any right, lien, claim, or lien against the property”.
Title insurance companies, such as Riverside Abstract, are dedicated to ensuring that your rights and interests in a property are clean, that the transfer of title is done efficiently and properly, and that your interests as a home buyer are protected to the maximum.
Title insurance companies, including Riverside Abstract, provide their services to buyers, sellers, developers, builders, mortgage lenders, and others who are involved in a real estate transfer. Title companies routinely issue two kinds of policies - the owner's, which covers you, the homebuyer, and the lender, which covers the bank, savings and loan society, or other lending institution at the same time, throughout the life of the loan. Both policies are issued at the time of purchase for a single low-cost premium.
However, before issuing a policy, the title company, such as Riverside Abstract, conducts an extensive search by reviewing the relevant public records to find out if there is someone other than you who has an interest in the property. Company personnel can conduct such a review using public records.
Riverside Abstract experts indicate that through such a thorough inspection of the records, any title issues are usually found and cleared up before the property is purchased. After the issuance of a title policy, if for any reason any claim is made against the property that is covered under the title policy, the title company will pay the legal fee for the defense of your rights, as well as any covered losses arising from a valid claim. Such protection is in effect as long as you or your heirs own the property and it is yours in exchange for a single premium paid at the time of purchase.
Because title companies, including Riverside Abstract, are dedicated to eliminating risks before they arise, they are markedly different from other kinds of insurance you may have purchased. Most insurances take risks by providing financial protection by pooling the risks of loss arising from unforeseen events, such as a fire, theft or accident. On the other hand, the purpose of title insurance is to eliminate risks and avoid losses caused by title defects that happened in the past. Such risks are inspected and mitigated before ownership is transferred.
You, the home buyer, and the title company take advantage of risk elimination. This reduces the likelihood of claims being filed.
Buying a home is a big step both emotionally and financially. Through title insurance you are assured that any valid claim against your property will be handled by the title company. In fact, the chances of a claim being filed are low.