The Title Insurance
The purchase of real estate is without doubt one of the biggest decisions you will ever make. Before the property will be conveyed to you as the new owner you want piece of mind that no third party ever can claim any interest in it.
The investigation that your rights and interest in the property are secured is the task of the title company. The payment of the title insurance premium (will usually be paid by the seller, but can be negotiated otherwise) provides you with a continuous insurance protection in the amount of the purchase price.
The process of the so called title search includes a detailled inquiry in all relevant public archives and checks documents to determine whether anybody else than you has a right or interest in the property. By means of this search the insurance company normally can uncover potential problems with regards to ownership and fix them before the closing.
Your title insurance names the property and includes all recorded restrictions of your ownership. Further it states the responsibilities of the insurance company in case it comes to a claim by a third party. Typically your title insurance will protect you from:
any claim or dispute of ownership by a third party in front of a court (the insurance company will defend your ownership without you having to pay any court or other fees)
- any title defect which can not be eliminated (the insurance company will protect you from financial losses up to the amount stated in the title policy)