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What every REALTOR® should know about owner’s title insurance: Part 3

Last time we covered how title insurance protects your clients. This week, let’s discuss what title insurance covers.

What does owner’s title insurance cover?

Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against certain undiscovered errors in the title.

Title issues include unknown:

  • Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
  • Pending legal action against the property that could affect you
  • Unknown heir of a previous owner who is claiming ownership of the property

Unforeseeable title claims include:

  • Forgery: making a false document
    • For example, the seller misrepresents the identity of the person who sold the property.
  • Fraud: deception to achieve unfair gain
    • For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.
  • Clerical error: inconsistent paperwork and historical records
    • For example, an unforeseeable discrepancy in the property or fence line can cause confusion in ownership rights.

Tune in next time to discuss the enduring value of title insurance. Don’t forget to like our Facebook page, so you don’t miss any of the blog posts in this series! If you missed an earlier blog, you can it here. As always, don’t forget to request a Luckett location on your next real estate contract!

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