Title Insurance is a type of insurance that protects a property owner or lender from any loss or damage suffered. This may be as a result of problems with the title to a piece of real estate. Title insurance will provide cover for issues such as disputes over ownership rights, forgery, errors in public records, and undisclosed liens. The policy is usually purchased at the time of a real estate transaction or transfer and remains in valid as long as the policyholder or their heirs own the property. Title insurance provides peace of mind to property owners and lenders. The policy will ensure that they have a clear and marketable title to the property.
There are basically two type of title insurance. This are:
1. Owner's title insurance
Owner's title insurance, also known as owner's policy, is a type of title insurance that protects the property owner from any financial losses that will arise from title issues. This type of title insurance provides coverage for a wide range of title-related problems such as disputes over ownership rights, forgery, errors in public records, and undisclosed liens. The policy provides coverage for the full value of the property, and remains in effect as long as the policyholder or their heirs own the property.
Purchase of owner's title insurance policy ensure policy owner can have peace of mind that they have a clear and marketable title to their property, and that they will not be responsible for paying any unexpected costs if a title issues arises in the future.
2. Lender's title insurance
Lender's title insurance, also known as a lender's policy, is a type of title insurance that protects the lender's investment in a property in the event that a problem with the title is discovered. This type of title insurance provides coverage for issues such as forgery, disputes over ownership rights, errors in public records, and undisclosed liens. , and ensures that the lender's loan is secured by a valid and marketable title.
Lender's title insurance is typically required by the lender as a collateral or condition of the loan and is purchased by the borrower. The policy amount is based on the amount of the loan and remains in effect until the loan is settled. Unlike owner's title insurance, which protects the property owner for as long as they or their heirs own or possess the property, lender's title insurance only provides protection for the time period of the loan. After which the policy expires.
Owner's title insurance protects the homeowner against any legal issues that may arise regarding the ownership of their property. Lender's title insurance protects the lender's investment in the event that a problem with the title is discovered.
However, it's important to note that individual title insurance companies may offer variations or combinations of these two types of title insurance, it is advisable to seek which options are on the policy. This ensures the policy you purchased will meet your need and covers what you want to be covered.
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