What is Title Insurance?
Title insurance is important in each and every real estate purchase. Title insurance protects the buyer. It insures that he or she is getting "clear and marketable" title to the property.
About Title Insurance
There is a one-time fee (non-recurring fee) for title insurance. As long as the title to the property doesn't change, the buyer is protected. At some point in the future, someone may come forward with a claim to the property. If that happens, the title insurance company will pay ALL the court costs. And title will pay the buyer for any loss that is covered by the policy.
Why Title Insurance is Important
Many people may think that buying property with title insurance is one way to save money. It is the WORST way to save money. Regardless of the seller of the property, you need to get title insurance. Even if the seller is a friend or even a relative, ALWAYS get title insurance. There is always the possibility that there is some type of problem with title. Maybe there is some type of restriction on the use of the property. Most of the time, the seller isn't even aware that there is a problem. Typically, there isn't a problem or "cloud on title", but sometimes there can be a problem.
Paying a Claim
Title insurance companies rarely have to pay a claim. This is because if there is a problem with title, it is usually determined prior to escrow closing. So, if you are selling a property or buying a property, make sure that title insurance is part of the sale. Buying a property is a major investment, so don't jeopardize it, get title insurance! It is a small cost to pay to protect your assets. You will be glad you did, I promise.