Title Insurance Policy is of great importance when you are making an investment for which you deserve a title. This is more important when the amount invested is huge like investment made in real estate.
Title insurance policy is an indemnity made between insurer and insurance company to cover any or all damages caused to the title which the insurer has insured with the company. Losses or damages caused to the title due to lien defects or due to any defects in encumbrance etc. are covered under title insurance policy. But, for getting the claim the defects must not be one, excepted from its coverage as per terms and conditions. The title insurance policy is issued after examining all the public records and any obligations like of money that is outstanding on behalf of property are shown in insurance records.
If you are having a title insurance policy you will be ensured that the title you own is good and only exceptions are those set out in the policy. The title insurance policy is also an insurance against certain matters like forgery, party identity, former owner’s completeness or incompleteness, missing heir’s interest on property, individual’s status regarding sale of property etc. which is not appearing in records.
Standard title insurance policies like owners policy and mortgage title insurance policy are on the basis of public records of the place where the land is located. No insurance is provided to matters that can be disclosed only on survey or inspection of property. Unrecorded easements, money obligations, lien obligations, utility rights that are off the record with regard to way, roads either private or public, community driveways or any other encumbrance or claims or rights made against property by any other person or persons who is possessing the property but are not shown in public.
It is for the issuing company to provide coverage to matters they have observed during physical inspection but such matters will be subject to exceptions that is also determined by the inspector as proper and fit. For this type of coverage an additional premium is charged. When an insurance coverage of this type is given under title insurance policy it is called as extended coverage.
Title insurance policy is of various kinds and the difference is with regard to whom the policy is issued. If the title insurance policy is issued to owners of real estate it is called owners policy. If issued to lenders of mortgage, it is called as mortgage policy. There are special types of title insurance policy too in addition to this and it can be seen that there are various kinds of policies to meet the needs of almost all people dealing with real estate.