The Past Can Determine Your Future
Generally, a person thinks of insurance in terms of the payment of future loss due to the occurrence of some future event. For instance, a party obtains automobile insurance in order to pay for future loss occasioned by a future "fender bender" or for the future theft of the car. Title insurance is a unique form of insurance. It provides coverage for future claims or future losses due to title defects which are created by some past event (i.e., event prior to the acquisition of the property.) These risks are far less obvious than those protected against by automobile insurance, but can be just as devastating.
The following information will answer some commonly asked questions about title insurance.
It is of utmost importance that you are protected against pre-existing title defects to the property when you purchase real estate. In order to do so, you must first be informed of any existing rights or claims that may, in the future, threaten your title and possession to the property. Title insurance provides you with this protection.
In order to determine the status of title, Commonwealth Title conducts a diligent search of the public records for those documents associated with the property. Commonwealth Title then examines those recorded documents in order to determine if there are any rights or claims that may have an impact upon the title to the property. The title search may reveal the existence of recorded defects, liens or encumbrances upon the title such as unpaid taxes, unsatisfied mortgages, judgments and tax liens against the current or past owners, easements, restrictions and court actions. These recorded defects, liens and encumbrances are reported to you prior to your purchase of the property. Once reported, these matters can be accepted, resolved or extinguished prior to the closing of the transaction. In addition, you may be protected against any recorded defects, liens or encumbrances upon the title that are unreported to you and which are within the coverage of the particular policy issued in the transaction. This is the first benefit you receive from title insurance.
The title to the property that you have purchased could be seriously threatened or lost completely by hazards which are considered "hidden risks." "Hidden Risks" are those matters, rights or claims that are not shown by the public records and, therefore, are not discoverable by a search and examination of those public records. Matters such as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the records are examples of "hidden risks" which could provide a basis for a claim after you have purchased the property. In order to protect you against this possibility, Commonwealth Title provides insurance coverage for such claims. This is the second benefit you receive from title insurance.
If a claim is made against your insured title, Commonwealth Title Insurance Company can protect you by: (1) Defending your title, in court if necessary, at no cost to you, and (2) Bearing the cost of settling the case, if it proves valid, in order to protect your title and maintain your possession of your property.
Title Insurance Protects Your Asset
Title insurance gives you the assurance that any possible clouds we have discovered on title to the property you are purchasing have been called to your attention and that such defects can be corrected before you buy. Additionally, it is insurance that if any undiscovered claims covered by your policy arise out of the past to threaten your ownership of real estate, it will be disposed of, or you will be reimbursed exactly as your title insurance policy provides.
Only One Premium
Unlike other forms of insurance, the original premium is your only cost as long as you own the property. There are no annual payments to keep your Owner's Title Insurance Policy in force.
Rely On Commonwealth Title To Protect Your Investment
Every owner, purchaser and beneficiary, whether by a deed or contract, should have an insured title. The entire investment depends upon the quality of title. If you are buying real estate mortgages, you are paying for a good title and you should see that you have one. If either fire insurance or title insurance is omitted, your security is not complete.
Our title policy can protect you against unforeseen defects in title that would not be revealed by an abstract, the public records or an attorney’s opinion.
Whether this is your first home or fiftieth real estate investment, ask your realtor or broker to protect you and your property with Commonwealth Title.