insurance-300x225When you make the down payment and receive the title to a property, you have ownership rights over that piece of land and what ever you build or plan to build. If there is an existing structure on that land, your title deed will, in most cases, give you ownership over it as well. In some cases, the previous owners or some long gone owners of the property can come back to you and stake claims. Mistakes in the title deed of long gone owners, forgery of documents and mortgage fraud has left a lot of new property owners in legal headaches on their new property.

Title insurance is something that can be done as a precaution to protecting your investments. A title insurance is issued by title companies and protects your financial interests, and will defend your title’s claim of ownership in court if needed.

Difference between a title policy and a home insurance

A home insurance policy looks to keep your finances secure and works as a backup in case the house, land and the things inside the home are damaged by either forces of nature, accidents, or intentional damage by a third party. They are divided into fire, earthquake, water, wind, and hail, to name a few. They are issued by insurance companies and they have their own set of rules concerning coverage and claims. A title insurance is something that is very different from a general home insurance in that it protects your right to ownership of the land and your title deed.

How it works

Before signing in the papers, a title insurance company will do extensive background work spanning many years and thorough research on the previous owners. They will make sure that there are no outstanding claims or any issue that can come back to the new owners and if those errors involve only paperwork and other minor errors they will fix it. If in case there are some claims that come back to the current owner, the insurance policy will make sure they are resolved and will cover losses within the specified coverage agreed.

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