What is Title Insurance?

Buying real estate is one of the largest investments a person will make in their lifetime. As a result of this fact, laws and regulations have been developed to protect that investment. Title Insurance is a contract between the insured (the buyer) and the title company. Under the terms of this contract the insured agrees to pay a premium and the title company agrees to defend the title or pay losses the insured may suffer if the title is challenged or defective.

It is extremely important that the buyer be financially protected against any undisclosed restrictions, liens or other types of claims against the property. A title company provides this information for its underwriter by examining public records and issuing a commitment as to the current condition of the title.

Even the most careful search of the public records will not find every title problem. Because some problems are hidden, your title may appear to be perfect but in fact there may be a problem. To give you an idea of the types of title problems that may occur, here is a list of possible problems that could result in partial or complete loss of your property or an expensive lawsuit:

  • Documents executed under duress
  • Defective acknowledgments
  • Deeds by minors
  • Inadequate legal descriptions
  • Easements established through continued use but not discovered by a survey or in the public record
  • Mistakes in recording legal documents
  • Mistaken reports furnished from taxing authorities
  • Misinterpretation of wills
  • Deed of community property recited to be separate property
  • Errors in tax records
  • Birth or adoption of children after date of will
  • Falsification of records
  • Undisclosed or missing heirs
  • Errors in indexing of legal documents by the County
  • Surviving children omitted from a will
  • Deeds to or from defunct corporations
  • Marital rights of spouse allegedly, but not legally, divorced
  • Instruments executed under fabricated or expired powers of attorney
  • Forged deeds, releases, etc
  • Deeds by persons supposedly single but secretly married
  • Deeds from persons not competent to handle their affairs