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Revised June 08, 2002 .
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Because your home is
probably the most important investment you
will ever make, you want to do all you can
to protect it. One of the ways you can do
that is through homeowner's insurance. But
even the most comprehensive homeowner's
policy won't help if your right to the
property itself is questioned. That's why
owner's title insurance should be an
essential part of the home-buying process.
The FAQ on this page should help explain
why protecting the title to your property is
one of the most important aspects of home
ownership.
 | What is Title Insurance?
The legal answer is "the
application of insurance principles
to hazards inherent in real estate
titles."
| What is Title?
"Title" is the foundation
of ownership property. It means that
you have a legal right to possess
that property and to use it within
the restrictions imposed by
authorities or limitations on its
use-superimposed on the basic right
to possession by previous owners.
| Why does buying a home differ
from all other purchases?
No other property has a useful life
that compares with that of land.
Owners die, new ones succeed, but
land goes on forever. Owners of
goods may change their locations at
will, but land is immovable, it
lends itself to the absorption of
innumerable rights. Over the ages,
this so impressed lawyers and
jurists that they formed a separate
body of laws for land. These laws,
creating many types of rights in
land, are so numerous and so complex
it is impossible for there to be a
mathematical certainty of ownership.
| What is meant by a title defect?
Anything in the entire ownership of
a piece of real estate which may
encumber the owner's right to the
"peaceful enjoyment" of
the property or which may cause the
owner to lose any portion of the
property.
| Is an attorney's opinion
sufficient if he or she has examined
the title?
There are many defects which even
the most astute title examination
will not uncover. The attorney isn't
liable for loss caused by hidden
defects.
| Will a General Warranty Deed
fully protect me?
The chance of recovery is dependent
entirely on the financial ability of
the grantor to pay at the time that
judgment is acquired.
| What's an Abstract?
A condensed version of the recorded
documents affecting title to the
property. Same liability an
attorney's opinion.
| The contract I signed makes the
sale subject to title to the
property's being good. Doesn't that
protect me?
If anything should happen to defeat
the title, your cause of action
would be against the seller, and his
ability to pay. Attorney's fees and
expenses would not be covered.
| The real estate broker said the
title is good. Isn't that good
enough?
No one can be sure the title is
clean.
| What happens if my home is
protested by title insurance and
it's challenged?
You notify the title insurance
company and they defend the title,
even if it goes to court. The title
company bears all expenses.
| The person I'm buying the house
from has insurance. Why do I need
it?
The deed into the new owner could be
defective because of forgery,
incompetence, easements,
construction, encroachment or any
number of other circumstances.
| How does title insurance protect
my home?
It places the assets of a
corporation behind the title to your
home. If attacked, the title will be
defended without cost to you and if
the title, or any part of it, should
be defective, you will be
reimbursed, up to the face amount of
your policy, for any financial loss
incurred. |
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For more information on
title insurance, please see "What
is title insurance?"
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"A professionally
designed web site won't help your business,
nearly as much as a poorly designed web site
will hurt it."
- Ed Whitcomb
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