Title Insurance Why Do I Need

The title to your home is the legal proof you own it. When a house is purchased, the property’s history is reviewed to determine if the title is clear and free of defects before the sale is closed. Title Insurance protects you from losses if a covered defect is found in your title. It provides a “safety fence” around your property.

Virginia Title Company provides title examination services for new and existing homes. We provide Owner’s Title Insurance to protect the buyer after the sale and Lender’s Title Insurance to insure the lender for the amount of the mortgage.

With the purchase of your home, you naturally want the assurance that your ownership is absolute and uncontested, both now and in the future. Even though the public record of previous ownership is thoroughly examined for flaws or conflicts, hidden or unforeseen problems may exist which may crop up later.

Title Insurance places the assets of a state-regulated insurance company behind the title to your home. If attacked, your title is defended without cost to you and if the title, or any part of it, should be other than as insured, you will be reimbursed, up to the face amount of your policy, for any financial loss incurred.

Clearly, a policy of insurance protecting your title interest is desirable. It can save you money, time, and trouble. In fact, mortgage lenders wisely insist on Lender’s Title Insurance because it insures the validity of their mortgage.

However, Lender’s Title Insurance does not protect you, the Owner. If there is a failure of title, you have no protection and would lose both your property and your equity. You could also incur legal fees and any tax penalties assessed against your property. Your lender is the only one protected by Lender’s Title Insurance.

When acquiring property, it’s prudent for the buyer to obtain Owner’s Title Insurance. If someone initiates a claim against your title, Owner’s Title Insurance provides you with a legal defense, including attorney’s fees, as provided in your policy. If your title should fail, you will be reimbursed for the equity in your home up to the face amount of your policy.

In fact, title problems arise in one out of every four real estate transactions, according to the American Land Title Association (ALTA).

A recent industry survey showed that title insurers paid approximately $582.7 million in claims in 2002, compared to $465.1 million the previous year.

To obtain this coverage, you pay a one-time premium as part of your closing cost. There are no recurring premiums. Also, the coverage lasts forever, protects you and your heirs, and continues even after you sell the property.

Some of the hidden title risks that would not be disclosed by even the most meticulous title search, but are covered by an Owner’s Title Insurance policy include:

	Forgery
	Fraud in the execution of documents
	Undue influence on a grantor of a deed
	False impersonation by someone purporting to be the owner of the property
	Incorrect representation of marital status
	Undisclosed or missing heirs
	Wills not properly probated
	Misinterpretation of wills and trusts
	Mental incompetence of a grantor in a deed
	Transfer of title by a minor
	Heirs born after the execution of a will
	Incorrect legal descriptions
	Non-delivery of deeds
	Unsatisfied claims not shown in the public records
	Deeds executed under expired or false power-of-attorney
	Confusion due to similar or identical names
	Erroneous reports furnished by tax officials
	Incorrect indexing of the land records
	Clerical errors in recording legal documents
	Delivery of deeds after the death of the grantor

Title Insurance provides protection from past events which may or may not be part of the public records, but can adversely affect an owner’s interest in real property.

Title Insurance protects against matters of public record, plus hidden title defects that even the most diligent title search may not discover.

A Title Insurance premium is paid only once. Most title insurers offer an inflation protection rider that insures the owner’s equity up to 150 percent of the original purchase price.