Title Insurance 101

In Arizona, the means to convey clear title from a seller to a buyer is through the issuance of a title insurance policy.  Title insurance provides coverage for owners of real property and lenders who use real property as security for a loan by protecting them from mistakes made in a title search, such a an overlooked lien due to a divorce or delinquent tax liens that did not show up in the title search.  

Most home buyers generally forget that they even have title insurance against their property.  The process to research the history of a property's title generally uncovers the most obscure claims against a home.  However, there still remains "hidden risks" that could threaten the home owner's claim to ownership of a home.  Matters such as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the records are examples of "hidden risks" that could provide a bisis for a claim after a home owner has purchases a property.  

Furthermore, title insurance gives the home owner assurance that possible clouds on title have been brought the the home buyer's attention and that such defects are corrected before taking possession of the property.  Additionally should any clouds or defects on the title from the past threaten the ownership of the property, title insurance protects the home owner by correcting the situation.

Title insurance will pay for defending against any lawsuit attacking your title as insured, and will either clear up title problems or pay the insured's losses. For a one-time premium, an owner's title insurance policy remains in effect as long as the home owner, or his/her heirs, retain an interest in the property. 

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