What a Homeowner Walks Away With

OWNER’S POLICY of TITLE INSURANCE — OPTION OR NECESSITY?

By Kristi M. Holzimmer, Chief Manager, Central Alabama Title Center, LLC

Title insurance companies have protected the American dream of homeownership for more than a century and the behind-the-scenes work of title insurance agents ensures the quick and secure transfer of land, giving consumers and lenders confidence in their investment. On closing day, a homebuyer not only attains ownership of a property, the buyer also walks with the assurance that his interest in the property is protected. This is all achieved through the professionals working in the land title insurance industry.

When someone purchases a home, how can they be sure that there are no problems with the home’s title and that the seller really owns the property? Problems with the title can limit a homeowner’s use and enjoyment of their property, as well as bring financial loss. That is what a title search and title insurance are for.

After a buyer’s sales contract has been accepted, a title professional will search the public records to look for any problems with the home’s title. This search typically involves a review of land records going back many years. Nearly 40 percent of all title searches reveal a title problem that title professionals fix before going to closing. For instance, a previous owner may have had minor construction done on the property, but never fully paid the contractor. Or the previous owner may have failed to pay local or state taxes (See below for some other common title problems). Title professionals seek to resolve problems like these before you go to closing.

What happens if a problem arises after a homebuyer moves in? This is an additional benefit provided by the title insurance industry. An Owner’s Policy of Title Insurance remains in effect for as long as the policyholder (or their heirs) owns the property that is insured.  A claim could actually be filed 50 or 100 years after the policy was issued.  And, an Owner’s Policy covers legal expenses involved in defending the title on behalf of the homeowner.

Let’s face it — a homebuyer certainly has more than enough to think about during the closing process when purchasing a new home.  An Owner’s Policy provides peace of mind that comes from knowing their investment is protected.

The American Land Title Association helps educate consumers about title insurance so that they can better understand their choices and make informed decisions. Homebuyers, regulators and legislators are encouraged to check out the website, www.homeclosing101.org, to learn more about title insurance and the closing process.  Share this website with everyone of your customers!

The Central Alabama Title Center is a multiple bank-owned title insurance agency conducting business in Alabama, Florida and Mississippi.  For more information about the company and its services and how we can help homebuyers and lenders, please contact us at 888-207-6200.

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