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Do I Need Title Insurance?

If you’re asking if you need title insurance, the short answer is yes. Title insurance is used for two important reasons: it protects your lenders interests and your own against a variety of issues, everything from boundary disputes to liens held on a property to encroachments and even improperly recorded documents. It’s a very small price to pay for a lot of protection against title challenges to your property.

A magnifying glass, toy house, and piggy bank sit on top of a blueprint

Every time that a property changes hands, a title search is done and then a new title insurance policy is usually purchased.

What is Title Insurance?

Before you take ownership of a property, holding the title as proof, you want to make sure that title is free and clear. To do so, a title search is conducted in-depth before closing on a property. Your experienced title team carefully researches to make sure that there are no liens, judgments, easements, or anything else that could potentially interfere with your rights to the property.

For that search and assurance, you pay a one-time fee at the closing. Then, you’re covered for the entire period that you have an interest in the property.

Title insurance is a policy that covers the possibility of a third-party claim on the property, including those that don’t show during a title search but appear after closing.

Your title company gathers and studies a wide range of sources including documents like deeds, county land records, bankruptcy records, tax and divorce records, as well as any other kinds of financial judgments that could possibly be attached to a real estate property. The title company works hard to make sure to prevent the possibility of hidden claims or liens by any party, including those neither the seller or buyer may have any knowledge about.

The title search always goes back in time as much as possible, often even before a home was built. It’s important to be this thorough in a title search, because title insurance is designed to protect both the property owners and lenders against unforeseen property claims.

Of course, if any issues should turn up, then a skilled title insurance company, like the experienced team at PR Title, will work to resolve them.

Preparing an Abstract of Title

Once a title search is completed, the title company is able to see the history of a property’s ownership. Based on that history, the company will then prepare a summary of its findings, which is called an Abstract of Title.

Title Opinion Letter

Finally, the title company produces a legal document which is called the Title Opinion Letter. The letter is issued in order to show the validity of the title. So, assuming that the title is valid, then the title company can issue title insurance.

Learn More About the Title Insurance at PR Title

If you have questions about the title insurance process or you’re interested in learning more about our title insurance services, then we’re ready to talk at PR Title. Contact our skilled title insurance team today, at (646) 666-5993.

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