What Is Covered Under Title Insurance

Protecting yourself against any issue or damage to the property you just purchased is a must, and there are many different types of coverage that could help you in case there is an issue or a problematic situation after you become a legal owner of a new home. Here, we will tell you more about title insurance, and we will tell you what is covered under it. Keep on reading if you want to find out how this type of coverage can help you protect yourself and your assets.

What is this type of insurance?

People often make mistakes when comparing title insurance to a basic home or a property insurance policy, and here is the reason why:

Title insurance in legal terms means that the owner of a certain property is legally covered when it comes to commercial use of the owner of that property, which basically means that the property and the person who purchased the property are legally protected from any kind of hidden debts and other legal issues that may be left and are tightly related to that property by the previous owner.

Property insurance policies are also known as home insurance policies or even home warranty which means that the property is secured from any unwanted situation that cannot be predicted, such as earthquakes, floods, fire, faulty installed wires, etc.

Even though these two categories are very similar, and can be often confused because they contain a single word that sometimes is enough for someone to be insured that nothing bad can happen because we have insurance, be aware that by legal terms and meanings they are very different. That’s why lawyers and even real estate agents suggest that if you are ready to purchase a property, you should be ready to give “a little extra money” for both types of insurance.

Depending on the insurance company, there can be different types of title insurance coverages, like basic, medium, or premium. The difference between these types of insurance coverages is that they all have different prices the more you pay, the better title insurance policy you can get.

What does it cover?

Now that you know more about why this type of insurance is important, let’s see what it covers when it comes to the things you are protected against.

The simplest way to explain this is that this title coverage will insure you against losses because of a defect in the title. This means that anything that has happened before you were the legal owner of the property is not your problem, and you will never be responsible for these things.

If the previous owner forgot to pay a bill, if they did not keep up with their loans or mortgages, or in case there was any other legal claim against them, by becoming a legal owner, you will never be charged for the things that happened before you signed those documents.

The right insurance company can help you with your coverage, no matter what you need, and they can guide you on getting the right insurance for your specific case as shown on website like https://www.sunnysidetitle.com.

With it, you will be covered in case there was any fraud that the previous owner did, in case there are other people who now claim to have partial or full ownership of the place you just got, if there are any flawed public records, in case there are false documents or signatures, or in case there is something that could lead to a decreased value of the property.

What is not covered?

Many people make the mistake of thinking that this type of coverage will get them reimbursed for pretty much anything that has happened before they were the legal owner of the property, and this can lead to a lot of problems in the future.

You need to be aware of not only what this insurance will cover, but also what will not be covered in case you choose to get it for your new home.

In case there are any pest infestations in your home that developed before you bought it, you will not get cash to cover the damages that may have occurred because of it.

To avoid this issue, you need to get the home inspected before you purchase it, and by that, save yourself a lot of time and resources. There are other types of coverage that can help you out with this, and in some rare cases you can get insured with the title coverage for this, but you will need to speak to your agent about the possibilities.

Another thing that is not covered with this is any damage that has occurred because of fire or water. This means that in case there is flooding, a storm, or a fire that will result in damage, or that has resulted in damage when you were not an owner of the place, will not help you get your money back. Any renovations or remodeling that you need to do because of this type of damage will not be part of the insurance, and you will have to pay for it on your own.

Note that when it comes to mold, mildew, rotting, or any similar thing, you will also not be insured against that. No matter when it began to form, and no matter the extent of the damage, you will need to pay for it from your pocket. Again, this is why you need to have your potential home inspected before you sign any documents.

The last thing that you will not get covered whit this insurance is any damages that were not caused by the previous owners. As we mentioned before, if the previous owner did something that he was not supposed to, and if there are documents that the damage was done while they were the ones whose name was in the legal documents, then the title insurance will cover you. In case there is no proof that the damage happened when they were the owner, and in case there is damage that occurred after they lost the ownership of the property, you will not be reimbursed for any fixes that you need to do.

These are most of the things that you need to know about title insurance and the things it does and it does not cover. To make sure that you are understanding every part of the agreement, and to know that you will be protected against any possible damage or fraud, you need to talk to your agent and see what they advise you.