Chicago Title put together a scary video of home title horror stories (for Halloween). There’s nothing funny about someone stealing your property through fraud or finding out that you don’t actually own the property you bought. Watch these horror stories if you have any doubts about the importance of title insurance.
What is title insurance — and why is it worth paying for?
Chicago Title will put the fear into you: An owner of a property you are buying, the owner’s family, and the owner’s heirs may have rights or claims in and to the property that you are buying.
“Those who may have an interest in or lien upon the property could be
- governmental bodies,
- judgment creditors,
- the Internal Revenue Service,
- or various other individuals or corporations.
The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.”
Now do you get why title insurance, even though it is so expensive, is so worth having when you are making the biggest investment of your life?
How Title Insurance Works
“Title insurance protects against losses due to defects in title. Before issuing a title insurance policy, title companies search and examine title plants or public records to identify liens, claims or encumbrances on the property, and alert you to possible title defects. The premium cost is a one-time fee payable at the time of escrow closing.In contrast, homeowner’s insurance insures your house and contents and may provide coverage for losses due to fire or lightning, theft, vandalism, and personal liability claims brought against you, the policyholder. Homeowner’s premiums are often billed monthly, quarterly or annually and installment payment options are often available. Title insurers in California are not permitted to provide homeowners insurance to you.”