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Buying a home is an exciting and rewarding experience. For many new homeowners, this accomplishment can be marred by the revelation they may not have legal ownership rights to the property they purchased. This often happens because of title-related issues. If you’re in the market to find the home of your dreams, consider title insurance to protect your investment. Here’s what you need to understand about this coverage before finalizing your real estate transaction.

What Every Homebuyer Should Know About Title Insurance

What Is Title Insurance?

This coverage is designed to protect against financial loss due to defects in a property’s title. Although the chain of title is thoroughly searched during the homebuying process, there can be hidden or undiscoverable defects that surface later. Title insurance is unique in that it protects events that happened in the past rather than disasters that may occur in the future.

Who Does It Cover?title insurance

There are two types of title insurance — a lender’s policy and an owner’s policy. A lender’s policy will only cover the financial institution responsible for issuing the mortgage loan. Most lenders require buyers to purchase coverage to ensure they have an enforceable lien on the property. If a problem with the title is uncovered, they will be protected up to the amount of the loan. In contrast, an owner’s policy will cover the buyer’s losses should there be an issue with the title. Aside from offering protection up to the face value of the policy, it will also pay for any legal fees a buyer incurs as the result of defending themselves against a claim.

What Does It Protect Against?

Title insurance coverage can vary from one state, provider, and policy to the next. Standard policies typically cover fraudulent sellers, forged documents, unknown or missing heirs, improperly filed documents, and undiscovered liens. Generally, a policy will exclude coverage for zoning issues, boundary line disputes, and environmental protection laws, though it may be possible to buy additional coverage for these scenarios.

 

Don’t run the risk of an unclear title causing legal and financial problems after you’ve bought a home. Protect your interests by purchasing title insurance from Hamilton-Martin Insurance Agency. Offering more than 20 years of industry experience, they know how to find the right policy for your needs. They have helped numerous residents in and around Louisville, KY, secure quality and affordable coverage from the most reputable providers. Call (502) 957-6500 to schedule an appointment, and visit them online to request a quote.

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