Why You Need Title Insurance

Other types of insurance coverage focus on possible future events and charge an annual premium – such as flood insurance or hazard insurance that safeguard against loss from wind damage. Title insurance protects against loss from hazards and defects already existing in the title and is purchased with a one-time premium.

Title search and examination is the first step.

Insuring a home’s title begins with a search of public land records affecting the property. The title agent or attorney working on behalf of the underwriter examines pertinent documents to determine whether the property is insurable. Those documents include deeds, wills, trusts, outstanding mortgages and judgments, property liens, highway or utility line easements, pending legal actions and notary acknowledgements.

When title problems are disclosed during the search process, they are corrected whenever possible to avoid future claims. According to surveys done by the American Land Title Association® (ALTA), title problems consistently arise in one out of three real estate transactions (36%).

A corrective process is vital to curing title problems.

The process of performing title searches and curing title problems does not come cheap. Industry studies find that title insurers spend an average of 92 cents out of every premium dollar as their cost of doing business.

The most common actions to cure title defects include:

·   Releases/pay-offs for liens – 33%

·   Releases/pay-offs for deeds/mortgages – 19%

·   Typographical corrections (names, addresses,
legal descriptions) – 17%

·   Clearing estate/family issue – 11%

·   Clearing physical property issues – 7%

 

What if a problem is hidden or missed?

After all this searching and examination, a title problem may still be hidden or missed, such as:

·   A forged signature on a deed

·   An unknown heir who steps forward to claim ownership of the property

·   An expired or forged power of attorney used during a property transfer

·   An incorrect public record

 

In each of these cases and many more, when there is appropriate title insurance coverage, a policy will offer financial protection. The title insurer defends the title and either perfects the title or pays valid claims.


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Mega Title, LLC

721 Route 34, Suite 3
Matawan, NJ 07747
Phone: 732-242-9835
Toll Free: 877-550-MEGA
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  • Samah and her team at Mega Title were efficient and professional in
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