WHY TITLE INSURANCE? |
|
|
Inevitably, someone in a purchase or refinance is going to think or ask, “Why title insurance?” There are great definitions printed about and there are lists spelling out good reasons every homeowner needs title insurance. James R. Maher, executive vice president of American Land Title Association (ALTA) explained it well when he recently said, “For more than 125 years, title insurance companies have protected the interest of homebuyers through a process that has given Americans a sense of comfort and security in what is almost always their most significant investment – their homes.” OK. But since it insures conditions that are a matter of recorded history (who owns the property and what interest already exist), the risk must be minimal.Not so. Title insurance underwrites considerable risks for homeowners and lenders from title problems. In fact, problems with title arise more frequently than is generally assumed. A recent ALTA survey of 420 title agents and abstracters showed that title problems arise in one out of four real estate transactions. Many of these problems are resolved without bothering the buyer or delaying the closing. Because of the research and corrective work performed by title professionals, few homeowners ever suffer loss under their insurance policy…the title insurer carries that risk. You still don’t think there is much risk? An ALTA industry study just released shows that title insurers paid approximately $661.7 million in claims in 2003. These payments were made to, or on behalf of, insured homeowners for losses they experienced under policies issued to them or their lenders, or to defend those titles from the claims of others, according to the ALTA. Next time someone asks you “why title insurance?” tell them in 2003 alone there were more than 661.7 million reasons why title insurance is a must. The explanation provided above is designed to acquaint you with the title insurance process. Remember that the best title examination or search cannot protect your equity and home from matters not appearing in the public records. Every title is unique and more complex than explained here. For further explanation of title insurance it is suggested you consult an attorney.
For more information read: Title Insurance - What Is It?Top 10 Reasons For Not Having Title Insurance Questions About Title Insurance - American Land Title Association
|
