Title insurance is not mandatory during a cash sale, but it is nevertheless a good way to protect you from loss. It is a nice feeling to know that you can afford paying for a home in cash, but before you commit to such a contract, you should at least consider title insurance, because it eliminates some important risks.
Analyzing list of insured risks also helps you establish how title insurance differs from the other types of insurance. If most insurances are contracts whereby the insurer is obliged to compensate the insured in case of specific and potential risks (for example, accident or death) that will occur in the future, by insuring the title you are protected from pre-existing problems. In this situation, the interest of the insurance company is to identify and eliminate all these possible risks related to the title of property even before the conclusion of the real estate transaction. The operation of identifying the risks is generally carried out by searching the records and registers kept by the public authorities or verifying the compliance of the title with the normative acts under which it was concluded in order to detect its possible defects or the factual or legal situations that could generate claims from some third parties.
What does title insurance cover?
Any type of land or building (property or rented)
Nominal risk, property in general or both
All policies include both the actual loss and coverage for different costs in case claims or disputes regarding the validity of the title
Coverage of identified risks / defects
requests for restitution/ claim of property
restrictive agreements, unknown conditions regarding the property
lack of access to property
irregularities regarding the registration of property
false documents, frauds
presumptive, unknown or missing heirs
incomplete or false inheritance documents
errors in execution, sealing, authentication, registration of documents
Benefits of having title insurance even in the case of cash purchases
Reducing the costs of due diligence process
Accelerating and streamlining transactions
The lawyer can focus on the contractual elements
It can be transmitted to the new buyer based on an additional act
It can be signed at any time either on the occasion of a transaction or independently
It is flexible (the insured amounts can be increased over time, for example as the real estate project develops)
Neglect should not be proven in order to file a claim for damages
Protection against fraud
Protection in case the documents controlled by lawyers are false
The luxury of not having to worry about your newly purchased property.