Abraham Lincoln lost his home twice because someone else had a better claim to the land. Daniel Boone eventually lost every acre of his vast landholdings after pioneering the Kentucky wilderness because he had the wrong papers. Title Insurance protects buyers from the hidden hazards of real estate ownership. In California, most real estate transactions are closed with a title insurance policy. Many home buyers just assume that when they purchase a piece of property, possession of the deed to the property is all they need to prove ownership. This is not true. Hidden hazards may be attached to real estate. A property owner’s greatest protection is aPOLICY OF TITLE INSURANCE … Title insurance is an insured statement of the condition of your title of ownership rights to a particular piece of property. The title insurance policy describes your property in detail and states what limitations, if any, there are to your ownership. For example, you may take ownership of the property, subject to existing liens or encumbrances, or you may not own the mineral rights, or easements may have been granted to utility companies or adjacent property owners.
Most importantly, the title insurance policy guarantees that the property you are purchasing is free from undisclosed liens, confusion regarding rights of ownership, and other clouds overshadowing the title.
Atitle insurance policy provides peace of mind by taking the risk out of acquiring property whose legal history is unknown to you.
WHAT IS THE TITLE INSURANE?
It is a contract of indemnity which guarantees that the title is as reported and, if not reported and the owner is damaged, the title policy covers the insured for their loss up to the amount of the policy.
THE TITLE SEARCH
Title companies work to eliminate risks by performing a search of the public records or through the title company’s own plant. The search consists of public records, laws and court decisions pertaining to the property to examine the current recorded ownership, any recorded liens or encumbrances or any other matter of record which could affect the title to the property. When a title search is complete, the title company issues a preliminary report.
THE PRELIMINARY REPORT
“Preliminary report”, “commitment”, or “binder” are reports furnished in connection with an application for title insurance and are offers to issue a title policy subject to the stated exceptions set forth in the reports and such other matters as may be incorporated by reference therein.
