What is Title Insurance?
Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances, or the defects in the title to the property. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements, and other items that are specified in the actual policy. Each title insurance policy is subject to specific terms, conditions, and exclusions.
Who needs it?
Purchasers and lenders need title insurance in order to be insured against various possible title defects. The buyer, seller, and lender all benefit from the issuance of title insurance.
How is a title policy created?
After the escrow office or lender opens a title order, Provident Title begins a title search. A Preliminary Report is issued to the client.
All closing documents are recorded upon escrow’s instruction. When recording has been confirmed, demands are paid, funds are disbursed, and the actual title policy is created.
Preliminary Title Report
The Provident Title Company Preliminary Report is an offer to issue a policy of title insurance covering a particular estate or interest in land subject to stated exceptions.
These exceptions may point to potential problems with an intended purchase, thus it is important for all parties to review and resolve the exceptions in the report.
A Preliminary Report provides a list of the matters in which will be shown as exceptions to coverage in a designated policy or policies of title insurance, is issued concurrently, covering a particular state or interest in land.
How Does a Title Insurance Protect Against Claims?
If a claim is made against the owner or lender, the title insurance company protects the insured by:
1. Defending the title, in court if necessary, at no cost to owner/lender, and
2. Bearing the cost of settling the case, if it proves valid, in order to protect your title and maintain possession of the property.
Each policy is a contract of “indemnity.” It agrees to assume the responsibility for legal defense of title for any defect covered under the policy’s terms and to reimburse for actual financial losses up to the policy limits.
Vesting | Common Ways of Holding Title
