Title Insurance FAQ's
Title Insurance can protect your financial investments in a property in the event that there is a dispute against your right to ownership of the land. Before you decide whether or not you should invest in Title Insurance, read the FAQ's from Title One below.
Ready to learn more about title insurance or interested in purchasing a policy? Learn more about Title One and the services they can provide.
1. What is a Title?
A title is proof of property ownership. In this case, it’s the evidence that you have the right to possess your home and its land.
2. What is Title Insurance?
Title Insurance protects you against financial loss if there is a claim against your ownership.
Because land can have many owners over time, others may have acquired various rights to the land and can file claims to dispute your right to the title. These claims can include improper court proceedings, missing heirs, incompetence of previous seller, recording mistakes, and unfilled liens.
Your title insurance protects you against mistakes or threats that might otherwise result in financial loss to you, since problems with real estate are transferred with the ownership.
3. Why Buy Title Insurance?
Your home is the most important investment you’ll ever make. Title Insurance ensures the safety of your home ownership and protects you against loss in case a claim is filed against your title.
1. What is a Title Search?
A Title Search is the “CarFax” of home buying.
It’s a review of all recorded documents regarding your specific piece of land. This will ensure that the seller has rights to sell the property and to discover any claims, defects, and other potential problems with the property.
The documents searched include deeds, court records, property and name indexes, and many other documents. This information can verify the quality of the title you’re buying.
2. What kinds of problems can be shown with a Title Search?
A Title Search can show title defects and liens, as well as restrictions to your ownership, such as unpaid taxes, unsatisfied mortgages, judgements against the seller, and restrictions limiting the use of the land.
3. What kinds of problems CAN’T be shown with a Title Search?
Often, Title Searches do not show such problems as fraud and forgery, defective deeds, confusion due to similar names, and clerical errors.
These errors can jeopardize your right to ownership.
1. What dangers of loss can I face?
If a lender has insurance and you don’t, you could face potential property loss.
As an example, let's say you’ve made a sizeable down payment on your new house, and your lender holds a mortgage lien. Your lender has insurance protecting him up to the amount of the lien.
In the event of a claim, the lender is protected against loss due to unknown title defects, but you still face the loss of your down payment, the loss of your home, and potentially thousands of dollars in court fees.
2. If my builder has a Title Insurance policy on the land, do I need one, too?
Yes. A title policy protecting your builder does NOT protect you.
Additionally, many things could have happened since your builder purchased the policy. For example, liens, judgments, and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property.
1. How does Title Insurance protect my investment?
If a claim is made against your property, title insurance will:
- Assure you of a court defense
- Pay all court costs and fees
- Reimburse you for your actual loss if the claim is valid
2. What is the cost of Title Insurance?
The cost is directly related to the value of the property. The higher the value, the more coverage is needed.
The insurance premium is small compared to the purchase price - usually 1% or less.
The premium is paid once and remains valid for as long as you own the property.
3. How long does my coverage last?
It is valid for as long as you or your heirs own the property.
Anyone involved in the transfer of the title of property will need Title Insurance. This includes attorneys, lending institutions, real estate professionals (brokers and agents), commercial and industrial builders and developers, and residential real estate buyers.
For property sales and title transfers in Michigan, Title One, Inc. is your best choice to obtain the title insurance protection you need. For more information, please contact them directly at (734) 427-8000.
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