Why Title Insurance?
Why Title Insurance?
This is a question we get as much as any other. The short answer is because it protects you (subject to the terms of your policy) from things that the attorney did not and could not know about. It does not provide you protection from known title defects found on your title search that are excluded in your policy. Title Insurance lasts as long as you own your house even after the attorney may have long retired. It’s relatively inexpensive (usually .5% or less of the homes value) and is a tool used by more than 80% of home buyers annually.
Title insurance protects your ownership interest in your home from title defects that were there prior to you buying your home that did not show up on a title search. Enhance Owners Title Insurance provides you additional protections primarily against fraud, forgery, and unrecorded rights such as easements. Most importantly, the title insurance will defend you against covered claims and will pay for your legal fees and any loss you may incur. The bottom line is that it provides peace of mind. As an attorney who has litigated title insurance claims in both Delaware and Maryland, I can assure you that these cases can be complex and timely and often involve unrecorded deeds in the chain of title. Examples of these defects include:
- Someone else owns an interest in your property. This could be due to an unrecorded or erroneously indexed deed;
- Someone else has rights affecting your title because of recorded leases, contracts, or options;
- Someone else has a recorded easement on the land;
- Expired, incorrect, or unauthorized documents and other issues with the closing process;
- Defective judicial or administrative proceedings like zoning, bankruptcy, etc.
- Violation or enforcement of laws or regulations if there is notice recorded in public records including zoning or land use violations; and
- Your title is unmarketable which affects the sale, lease, or mortgaging of a property;
- Standard title insurance is unaffected by a transfer into a solely owned LLC or revocable trust.
Title insurance works like other insurance, it gives you peace of mind knowing one of your largest investments is protected.