An Owner’s Title Insurance Policy is your best protection against potential defects that can remain hidden despite the most thorough search of public records. A Lender’s Title Insurance Policy also exists to protect your mortgage lender’s interest.
For a one-time premium, a title company will agree to reimburse you for covered losses suffered due to undetected defects that existed prior to the issue date of a title policy, up to the amount of the policy. Unless specifically excluded, a title policy also provides for legal defense costs.
A Title Insurance Policy protects you against potential defects such as:
Forged deeds, mortgages, satisfactions, or releases
Deed by person who is mentally incompetent
Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized, or defective under foreign laws
Deed challenged as being given under fraud, undue influence or duress
Deed signed by mistake (grantor did not know what was signed)
Deed executed under falsified power of attorney
Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
Deed affecting property of deceased person, not joining all heirs
Deed recorded but not properly indexed so as to be locatable in the land records
Undisclosed but recorded federal or state tax lien
Undisclosed but recorded judgment or spousal/child support lien
Undisclosed but recorded prior mortgage
Undisclosed but recorded boundary, party wall, or setback agreements
Misinterpretation of wills, deeds, and other instruments
Discovery of later will after probate of first will
Erroneous or inadequate legal descriptions
Deed to land without a right of access to a public street or road
Forged notarization or witness acknowledgment
Deed not properly recorded (wrong county, missing pages or other contents, or without required payment)
Deed to a purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises