Do You Need Title Insurance Services in AZ?
All your hard work has paid off and you just purchased your dream house. Maybe you got a great deal on it…or, maybe you paid an amount over the list price. But in your mind, you’ll figure out a way to come up with the extra money, starting with cutting your title insurance. Not so fast. If you are a homeowner, you need title insurance services in AZ.
What Are Title Insurance Services in AZ?
Most people are familiar with the types of insurance that cover events that have not yet happened – ones that typically occur before the date the policy is issued. Title insurance, on the other hand, covers events relating to the title that has already happened. It does not cover anything that happens to the title after the date of issuance.
Before offering to issue a title insurance policy, a title company will do a title search to learn whether there are any problems or limitations with the title. This search is performed in an effort to minimize the risks of offering insurance. By minimizing the risks of claims being made, a title insurance company is able to offer its insurance policies for a relatively low, one-time fee.
What Can Title Problems Arise?
Examples of problems that can come up after you purchase your property include:
- Fraudulent acts by prior owners, such as forged documents;
- Impersonation of the true owners of the land by fraudulent persons;
- Execution of the deed by someone who is a minor or otherwise not competent;
- Mistakes in public records or in recording the legal documents;
- Defective acknowledgment due to lack of authority of notary;
- Descriptions that appear to be, but are not, adequate;
- Erroneous location of an ancient pipe or sewer line which does not follow the route of a granted easement;
- Invalid, suppressed, undisclosed and erroneous interpretations of wills;
- Previously undisclosed heirs with claims to the property;
- Tax titles that are invalid because of irregularity in the proceeding;
- Liens for unpaid estate, inheritance, income or gift taxes.
How Title Insurance Service in AZ Can Help with Coverage and Claims
Although the events that cause these types of problems happened before you purchased the property, a good title insurance policy will provide coverage for the consequences of these events as they affect your ownership of the property.
There are two types of policies available, a lender’s policy and an owner’s policy. Your lender will probably require that you obtain a lender’s policy because the loan is made with the property as security.
Any defect in the title of the property affects the value of the lender’s security. Because the lender is only interested in protecting its security, the lender’s policy only covers the amount of the loan. As you pay back the loan, the value of the lender’s policy decreases.
Your equity in the property is not covered by the lender’s policy. As time goes by and you dutifully pay back your loan, your exposure increases, unless you have an owner’s policy, which covers the total amount of the value of the property at the time the property is purchased.
In the event that there is a claim against your rights of ownership in the property, title insurance services in AZ will cover the cost and fees associated with defending against the title claim. The policy will also cover, up to the face amount, any loss of title or the cost of perfecting the title. Without title insurance, you may be faced with huge legal fees and costs and even the loss of all or a portion of your property.
Facing a Title Claim? You Need Title Insurance Services in AZ
One way to help ensure that you actually hold ownership of a property is to ensure the title. Without it, the cost of defending a title claim would be quite high. In order to improve your chances against such claims, call us today to schedule a consultation to discuss your options and how we can help.