Title Insurance Provides Homeowners

Added Safeguards

Las Vegas Real Estate

 

Often Misunderstood Policy Protects Against Previous, Undetected Claims Against Property

If you've ever heard of someone that may have to give up their house to the previous owner after having lived in it for years, the truth of the matter is that it really does happen. Recently, I read an article written by Lew Sichelman appearing in the Las Vegas Review Journal on January 15, 2005 that helps to explain the reason why and what you can do to better the chances that it won't happen to you.

If you've purchased or sold a house before, you may recall paying or asking for title insurance. Discrepancies in the title are why title insurance policies exist and will come in handy if a title issue does arise. In his article, Lew Sichelman makes a good point about title insurance when compared to other common types of insurance. Whereas automobile and health insurance cover potential issues that may arise in the future, title companies insure against those issues that may have occurred in the past.

Even if you're not a professional in the world of real estate, you as a potential buyer can do some homework, too, to investigate the title of a property you're interested in purchasing. Visiting the web site of the county recorder is a good place to start. When it comes to clear title, there's no such thing as being overprepared.

Banks also need to know if there is clear title on any property that they lend money on. So to ensure that your loan runs smoothly, doing your homework can prevent undesirable circumstances with banks, too. Banks require title insurance for the loan, which is not the same as title insurance that you may think. "Owner's coverage" is what protects you, not the title insurance for the bank who holds your mortgage.

Title issues do arise, most of the time, the title company is or already has taken the necessary steps to clear the matter up. According to the American Land Title Association, its member companies spend 10 times the amount they pay out in claims to identify and correct discrepancies before they can become claims. According to the article, apparently about 1 in 4 transaction an error exists and needs to be corrected. A title can be clouded by various things, among them are:

• rights and interests
• mortgages
• liens for unpaid taxes or special assessments
• judgements against current or previous owners
• use and occupancy restrictions
• mineral and air rights

According to the same article, the American Land Title Association reports title insurers paid nearly $662 million in claims in 2003, either to or on behalf of insured homeowners for losses they experienced to them or the lenders, and to defend those titles from the claims of others.

One of the largest risks is the sheer number of you who do not have an owner's policy. It's worth it, check into it if you either don't have one or are not certain that you do.

 

Sichelman, Lew. "Title Insurance Provides Homeowners Added Safeguards." Las Vegas Review Journal 15 Jan 2005.