Page 12 - Master CA Buyers Guide
P. 12
What is TITLE INSURANCE and Why is it Needed?
WHAT IS TITLE INSURANCE? WHAT TITLE INSURANCE PROTECTS AGAINST?
Your lender must insure that the quality of the Here are just a few of the most common hidden
title to the property you are about to buy, and risks that can cause a loss of Title or create an
which you will pledge as security for the loan, is encumbrance on Title:
satisfactory. The lender does this by obtaining a
lender’s policy of title insurance, often referred • False impersonation of the true owner of the
to as the ALTA lenders title policy. property
The lender’s title policy protects the lender • Forged deeds, releases of wills
against loss due to unknown Title defects at • Undisclosed or missing heirs
the time of closing and in the future. This policy • Mistakes in recording legal documents
only protects the lender’s interest. It does not • Deeds by persons of unsound mind
protect you. That’s why you need an owner’s • Deeds by minors
title policy, which will be issued at the same • Deeds by persons supposedly single, but in fact
time as the lender’s policy for a one-time fee.
married
HOW CAN THERE BE A TITLE DEFECT IF THE • Liens for unpaid inheritance, income of gift taxes
TITLE HAS BEEN SEARCHED AND A LOAN • Fraud
POLICY ISSUED?
WHAT PROTECTION DOES TITLE INSURANCE
Title insurance is issued after a careful PROVIDE AGAINST DEFECTS AND HIDDEN RISKS?
examination of copies of the public records. Even
the most thorough search cannot absolutely Title insurance will pay for defending against lawsuits
assure that no Title hazards are present, despite attacking your Title as insured, and will clear up
the knowledge and experience of professional Title problems or pay the losses. By combining
Title examiners. In addition to matters shown expertise in risk elimination at the time of issuing a
by public records, other Title problems may policy, and protection against hidden risks as long
exist that cannot be disclosed in a search. as the policy remains in effect, your Title insurance
protects against title loss.
Never buy a home without your Owner’sTitle Policy!
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