Title Insurance

Title insurance is made up of two words-title and insurance. Let's understand both the terms separately to find out what title insurance is all about.

What is a title?
Title is a legal term which gives you all the legal rights to own, use and sell a piece of land. If you have a title of a land then this means that you own that land and you have the right to use and sell it. If there is a problem with the ownership then the title of the property is questioned.

What is insurance?
Insurance is a contract between an individual and an insurance company. The individual deposits a certain sum of money called as premium with the company and the company in turn agrees to pay a predetermined sum to the individual or his family in conditions of any uncertain event or claim.

Then what is title insurance?
It is the insurance against the problems related to the title. The title insurance thus provides you with the financial cover and protects you against any losses due to lien, defects in the title or lawsuit against your title. This insurance is available in Canada, Mexico, China, Europe, Australia and UK.

Why is title insurance important?
It protects you in case there is any defect with the title of your property. The problem with the title arises when someone in the house or any relative files a lawsuit and questions the ownership of the property. The title insurance gives you the cover for the legal expenses that you have to bear to defend yourself in case there is a claim against the property title.

The title insurance has its existence till you or the successor of the property is interested in the property of the title. But as soon as the property is sold to any other person the title and the ownership rights are transferred to the new person and thus this person has to purchase the title insurance policy.

What is the procedure for title insurance?
You can apply for the owner's title insurance policy. To apply for title insurance policy you have to visit any reputed insurance company dealing with title insurance. As you approach the company and show interest for a plan the company will first inquire about the title for which you wish to take a cover.

The company will first send its officials to find out the risks associated with the title, if any. For this they browse the records and plot the chain of the title and find out the claims for the property title if any. Through this search they endure that all the liabilities associated with the property are paid off. They further try to eliminate risks before they approve your application.