Title insurance is a binding obligation that safeguards a buyer against a financial loss, particularly when the asset has defects or is not debt free. It covers any undisclosed defect at the time of drafting the legal documents. We’ll help you see the need to get this coverage when acquiring your first asset with several reasons why title insurance can help protect your investment.
I. Title insurance can safeguard you against legal tussles
Unfortunately, some homeowners sell a property before settling their ownership disputes. These cases are common with family-owned assets like houses, cars, and lavish estates. This insurance coverage protects the amount you paid, until a court determines the rightful property owner.
II. To protect yourself against doctored documents
Some fraudsters mislead unwary potential home buyers and sell them high-priced assets. This insurance cover will help to indemnify the client if the owner is guilty of such activity. The insurer will pay the client the amount they paid to acquire the property. However, you must prove that you were a victim of a property fraud case.
III. Protects one against title deed error correction
The relevant land department cannot transfer a property’s ownership unless the previous title deed is error-free. Therefore, without title insurance, the new owner might have to chip in for the relevant staff to correct it. A title insurance company will help foot this bill to ensure you formalize your ownership.
IV. A title insurance coverage can protect you against a lien
Sadly, some homeowners sell a property before repaying the loan they borrowed for it. Remember that many banks prefer to give secured loans to get back their money if you default in repaying it. Title insurance will ensure that you won’t be responsible for any debt against your home beyond your purchase agreement.
V. It can cover you against property tax
The law expects all property owners to pay a small tax to the relevant tax collection body. This insurance will cover you if you acquire an asset whose owner has been evading taxes.
Conclusion
All of the above are great reasons to consider adding title insurance to your home purchase. If you would like to learn more about how title insurance can help you with your first home buying experience, contact us today to speak with one of our dedicated title experts.