What Title Insurance Covers and Doesn’t

You’ve purchased your property, now all that needs to happen is for you to understand exactly what your title policy covers. You have a “kind-of” understanding of what your homeowner’s policy covers. You always understood that a title insurance policy was “smart” to have, in case the long-lost relative of the deceased owner of the property from fifty-three years ago emerges claiming the property as their own. This policy ensures that you’re buying a property, or home, from the correct person and establishes the line of ownership. Legally the line goes back approximately 60-80 years, ideally, ending with the person you are purchasing your property from. The title company ensures that the property you are receiving title to is being sold without any liens, encroachments and that you are able to receive a commitment for title insurance. In the commitment, you get a snapshot of the status of the title for your soon-to-be property. You get a birds-eye-view of mortgages affecting your potential property, any liens, easements, or documents that could raise red flags and cause your purchase to evaporate. The commitment shows you the “legal owner” of the property. The purchase, or sale, of the agreement, will contain that the seller needs to grant you the title of the property “clean”, without any liens or money owed. Ideally, the seller, in the case of a lien, would pay the lien in order to give you a clean title. Within your title search, you will receive dozens of different documents relating to your property, its ownership, and so on. The commitment’s purpose is to give you a clear picture of the status of the title as of the date the search was submitted, or questioned in the search.

Title insurance does not protect you against things like termites, or anything that happens to the title of the home after your closing date. Say something happens concerning the title after your closing relating to a happening from prior to the title search, like the widow of the owner from the early nineties appearing and claiming that she has a claim to the title. Your title insurance would protect you in this case.  For anything that would be unrelated to the title, like a hidden den that houses chicken coups, or an underground pool in the basement, that was not disclosed in public records your title insurance can’t really help with any of that.  If you find yourself in need of title services, Gables Title Group and our experienced team are happy to help you receive the clean title to your dream property.