Buying a home is complicated enough before having to worry about title insurance. There’s so much that goes into closing on a home and it can all be very confusing. You know you should get title insurance, but you’re not exactly sure how it works. Here at Armour Settlement Services, we’ve created this guide to help you understand title insurance and exactly how it protects you:
How Does Title Insurance Work?
Title insurance works different from other types of insurances. Most insurances protect against future damages, while title insurance protects you retroactively against past issues on your piece of real property. Title insurance protects you against any claims made against your property, some of the most common being, property boundary disputes, liens, and defects in the chain of title.
Property Boundary Disputes
Property boundary disputes are among the most common types of claims seen in the title insurance world. These arise when two adjacent land-owners both make a claim on a piece of land. A very common example is when a neighbor puts up a fence on your property.
Title insurance protects you against boundary disputes. Your title service company may attempt to acquire the disputed property for you, pay you for the diminish in your property’s value, or pay you the value of the property lost.
Liens
A lien is a claim someone makes against your property that puts a hold on it and can even cause foreclosure. Liens are usually kept in place until a debt is paid off, commonly a mortgage or some kind of contractor debt.
Title insurance can protect against liens. Most liens should be found when conducting a title search, but occasionally some do fall through the cracks. Title insurance helps you out when an unexpected lien arises. For example: if the previous owner had an unpaid mortgage, then that could fall to you to pay it, something title insurance would cover.
Defects in the Chain of Title
A defect in the chain of title could be a variety of things. If someone at the public records office lost something or made a mistake, if a previous owner forged documents, or any kind of fraudulence.
Title insurance covers nearly any kind of claim involving a defect in the chain of title. Your title service company will insure you against any loss you might take. If there is a serious defect in the title, then it could lead to your losing of the property entirely, a massive loss. Title insurance would cover this, and without it you would be left only with complete loss.
If you have any questions about title insurance or any Maryland title services please do not hesitate to give us a call at (1-877-TITLE-30). The Maryland title professionals at Armour Settlement Services will be happy to answer any questions that you may have, and can guide you through the entire title insurance process.
