Title Insurance - The Role It Plays

By Aazdak Alisimo

When you purchase real property, you take ownership in the form of a deed for title. Ah, but how do you know the transaction is legitimate? Title insurance!

Technically, the purpose of title insurance is to protect a new homeowner from anything that could go wrong with a home's title. What types of things could possibly go wrong? What if a previous owner built a portion of your new home without adhere to building codes? Once you purchase that home, you may be faced with some hefty fines unless you have this type of insurance to protect you.

Additionally, this sort of insurance will help you when you are facing any sort of legal trouble regarding your new home. The truth is that you really don't know much about the previous owners at all, which is why it's important to purchase this type of insurance. Speaking of purchasing ... with today's housing situation, you may not have to buy your own insurance at all. Usually, a home buyer will have to purchase this insurance on their own, but you may be able to talk a current homeowner into splitting the cost with you ... or paying it in full.

Talk to a homeowner when you decide to purchase a home. Look over all the deeds and titles that go with the home, and make sure that you understand everything listed. If you are not sure, contact a lawyer and let them do a bit of research for you. Sometimes, you may not need to purchase this type of insurance at all (though this is not advisable). However, the basic purpose of title insurance is to protect you when the former owner leaves and you are standing in the middle of a mess.

By now, it may be more than obvious that this type of insurance is a good idea - especially if you are buying an older home. Without some sort of protection, you may not be able to defend yourself adequately when your home's titles come under question (and nobody wants to go through that type of trouble).

The purpose of title insurance should be abundantly clear now, which means that you have a decision to make. For the most part, it really doesn't make any sense not to protect your new investment, so start researching those types of insurance today.

Aazdak Alisimo writes title insurance articles for TitleInsurancePolicyCompanies.com where you can find a directory of title insurance companies across the country.