Updated: Jul 9
Title insurance is essential when purchasing a property as it insures against many ownership issues identified by a thorough real estate record search. A title company examines public records to establish ownership status and property rights and determines the title's insurability. Despite the expertise of professionals, certain risks like filing errors, forgeries, and undisclosed heirs are challenging to detect and may remain after you purchase. To mitigate problems, title insurance was developed to offer an owner and lender a policy to help reduce ownership risk. Lenders require a loan policy of title insurance when obtaining a mortgage to protect its interests until the loan is paid in full or satisfied on record, at which point the lender’s coverage ends. Conversely, an owner's policy insures ownership rights throughout your entire period of homeownership. This single-payment policy guarantees lasting coverage and peace of mind for your significant real estate investment.
Why is Title Insurance Used?
Legal property ownership is established through official documents like deeds or certificates of title. These documents grant individuals ownership of the property and the authority to control and transfer the property. The specific processes for acquiring title and the applicable laws differ from state to state. Still, as long as you're insured, your title insurance company will be an expert on the appropriate state's laws. Some common title problems covered under title insurance that may arise are:
Property line disputes - Differences between public survey plans and promised property boundaries can result in conflicts over property lines and their valuation.
Public record errors - It is essential to carefully review the deed for any clerical or filing mistakes that could impact its validity.
Liens on the property - Prior owner’s unsatisfied mortgages, judgement liens, municipal liens can be identified in a proper title search.
Violated building codes - Unresolved building code violations have the potential to impact the status of titles.
Falsified documentation - Regrettably, criminal individuals fabricate fraudulent documents, including counterfeit chains of title, which complicates the property purchasing process as it becomes challenging to ascertain the property's true owner.
Estate settling - Unpaid inheritance taxes are a long-lasting lien on property.
Encumbrances - Encumbrances do not usually impede the transfer of property ownership but may indicate that a third party holds a liability or interest in the property.
Risks to real estate title are always evolving, so Conestoga Title Insurance Company excels in providing up-to-date training and support to its agents. Our staff is friendly, knowledgeable, and easily accessible. We ensure our agents and clients stay informed about relevant industry updates and legislation through our company newsletter, website, memos, and direct communication. With a management team boasting over 50 years of experience, we have earned the respect of title agents, clients, and peers in the Pennsylvania title insurance industry by emphasizing relationship-building as a critical factor in our success. Contact us today to get more information about our title insurance policies.