Title Insurance is often misunderstood or not even considered by home buyers, sellers and sometimes even Raleigh, North Carolina real estate agents. Yet title insurance is one of the important parts of the real estate transaction.
Did you know that purchasing Title Insurance does NOT mean that the title to your Raleigh home is “good”, and it does NOT guarantee that you can maintain possession of your property? A title to real estate in Raleigh (or anywhere for that matter) can be lost due to unrecorded documents, errors in public records, identity theft or a host of other things.
OK, so what do Title Insurance Companies do? Title Insurance Companies “insure” “title” to “real property”. This means that they indemnify or make payment for loss or damages that arise as a result of defects in title. This is the equivalent of an insurance policy that compensates the insured for loss or damage up to the limit of the title policy.
Title insurance is not like other kinds of insurance. It covers past risks and for the most part it does not cover future risks like a home owner’s policy does for things like fire, storm damage, accidents, etc.
If the homeowner leaves the stove on, causing a fire, their hazard insurance policy covers the loss. But, if the owner adds a deck to his home, doesn’t pay for it, and has a mechanic’s lien filed, the title company will NOT pay off the lien.
So what typically is covered by a title insurance policy? All title companies do not have the same coverage, but the following are the general categories:
•Someone has an interest in the property that has not been disclosed
•Undisclosed Liens including: Taxes, Assessments, Mortgages, Judgments, State or Fed Tax Liens, Mechanic’s Liens, and Homeowners Association Liens
•A deed executed under falsified power of attorney, forgery or impersonation or by a person who is insane or mentally incompetent or a minor
Don’t forget – you can always ask the Marti Hampton team (your Raleigh Realtors) to answer any questions you may have.