In this post, you’ll learn what is title insurance and why it matters when you purchase a home.
What is Title Insurance?
Title insurance is a real estate term that every buyer should know. It is an insurance policy that protects buyers against possible defects in the title to the property. Unlike most insurance products, title insurance protects you from claims for past occurrences instead of future ones.
There are two types of title insurance; one for real estate owners and one for lenders. Lenders require title insurance to secure their interest in the property. As a property owner, you would purchase title insurance to protect your investment.
What Specific Claims Does Title Insurance Cover?
Defects in the title could include:
- Property line disputes
- Lack of legal access
- Liens against the property
- Errors in the public record
- Omitted heirs
Specifically, these claims may be something as small as typos in the public record to something as major as legal claims. A title examination should reveal these types of issues prior to the closing. The insurance offers added protection.
What Is the Cost of Title Insurance?
The policy is issued in accordance with the Opinion of Title issued by your closing attorney based on the title search conducted. Because closing attorneys perform the search and write the opinion, title insurance has lower rates in N.C. than most states. The final cost takes this into consideration as well as the price of the home with an average cost of $2 per thousand for the first $100,000. Then $1.50 per thousand over $100,000.
Title insurance is a valuable protection for you as a home buyer. It’s a small price to pay for the overall value it provides. If you have additional questions about title insurance and why it’s important, contact the real estate experts at Moore & Alphin.