On a market with a spectacular and constant development in the last years, title insurance is a new and useful mechanism for completing real estate transactions.
Insuring the property title is highly recommended, if you want to take as few risks as possible when buying a real estate property. This type of insurance represents a comfortable solution for all parties involved in a real estate transaction, as it facilitates the closing of the transaction even when there are certain reservations regarding its completion, because of potential risks related to the title.
Gradually, this new type of insurance has become a complementary solution to the due diligence report, which the law firms prepare for analyzing the validity of a property title.
Title insurance helps clear up title issues prior closing
Getting title insurance is a standard step that most home buyers take before purchasing the property. And for good reason, as buying a home is generally the single largest investment most people ever make.
One of the most important advantages of having owner’s title insurance is the clearing up of potential problems with the title prior to closing the purchase. In the US, roughly a quarter of title examinations reveal issues that are then cleared up before finalizing the purchase. If you get owner’s title insurance, the insurer will perform a thorough title search and analyze the historical records of the real estate property. If any problems arise, the title insurance company will ensure they are resolved before closing on the property.
Title insurance defends against potential title claims
In case some issues slip through the cracks during the title search, they can pose a real threat to your title and can lead to enormous costs in case of a claim if you don’t have title insurance.
The list of risks that can lead to the termination of the property title and which are covered by this insurance can differ depending on each insurer. They include but are not limited to: inconsistencies of the property title, requests for retrocession, false documents, fraud, lack of access to the building, non-compliance with the legal procedures for distribution of public property lands etc.
With owner’s title insurance, in case a claim does arise after closing, the insurance company will cover the costs for resolving the issue. This can include fixing the title issue itself, paying losses to the insured, or paying the legal fees