Does somebody else can claim the ownership of the property after closing? The answer of this question is yes. This could be possible if you do not possess Home Title Property Insurance.
If you do not have Home Title Property Insurance during the title examination of your property, then there are chances of legal entanglements when the rights of earlier owner are disregarded. The policy of home title property insurance offers protection to you against the loss that possibly occurs after sale closing, and someone else claims the ownership of that property.
What is home title property insurance?
Basically, home title property insurance is a type of insurance policy that facilitates a property owner to protect their properties from losses. These losses occur due to the lack in a title for the property. For instance, you purchased a property and later somebody else claims the real ownership on it. The home title property insurance compensates for the lawsuits and the lawyer bills if the person looks for this option. Similar things are applied in the mortgage of property. The only difference in property mortgage is that to protect the interest, the company who is lending money will acquire a separate policy of home title property insurance.
What is a title examination, and how does it influence home title property insurance?
This is a thumb rule that before closing of a property, it is mandatory to examine the title of that property. The examiner of title will check the past records of trusts, wills, deeds to conclude if there is any problem associated with it or not. If the examiner detects a problem or finds a “cloud”, than it is corrected by the examiner of title.
So, what is the necessity of home title property insurance? If title of property is concluded fine then the requirement of home title property insurance decreases. Well, this not true at all. You cannot conclude easily, if everything is fine with the title or not. To eliminate such risks, home title property insurance will protect you from the loss and damages, which could possibly arise in case there is a problem in title.
What insurance cover we get from the policy of home title property insurance?
Usually, home title property insurance is efficient enough to fulfill all the needs related to the insurance cover. Also, it can give protection even after the result of title examination is good, and later some problem arises. Moreover, home title property insurance compensates, if you face any damages or loss because title examiner missed the problems.
For instance, during the examination of title, examiner missed to check that the wife of previous proprietor is listed in the deeds, but at closing she did not sign-off. In such circumstance, if the wife sues you for her rights then home title property insurance will compensate for the losses.
Additionally, the home title property insurance also covers the losses occurred due to the inaccuracy in public records. Even after the examination and proofing of title, the problem arises then home title property insurance will pay off for the expenses of lawsuits. This also includes lawyer’s fees. To defend the rights, a person is required to take the help of lawsuits. If you lose your property then home title property insurance will also compensate according to the policy amount.