Title insurance was created in the United States to provide security for home owners against the financial loss of title to their property or the enforcement of mortgage liens.Title insurance became a product brought and distributed as the result of an established notice of weakness in the US land record laws. Having title insurance protects property owners or an individual who acts as a lender from having vested finances being easily recovered under stipulation of the government.
The first industry created to cater to the needs of providing title insurance to home investors was called the American Land and Title Association, ALTA. ALTA was first established in the early 1900’s to supply a demand of insurance, providing customers with coverage against the failed system governed by the US Land records. Starting with their first office, which is now headquartered in Washington DC, ALTA has grown into a huge industry providing international and domestic services.
One of the responsibilities of ALTA is to find ways to eliminate risks in home investing before such problems arise. ALTA accomplished this by providing an organized process of record keeping as well as researching the background of a property before it is purchased. Owner policies provide a huge umbrella of coverage against many issues that can arise from a person owning land or property. Some of the benefits of having title insurance is that it protects you against false impersonation of the true property owner, forged deeds or wills, undisclosed heirs to the property, any mistakes made in recording legal documents, and liens against any unpaid debt. All this is provided under basic coverage.
Schedule A & B:
To keep data efficiently organized insurance companies prioritize information into four areas:Schedule A, Schedule B, Schedule C, and Schedule D. All of these areas are important and should be looked over with detail. Schedule A will hold all your basic information regarding an investor’s insurance policy transaction, such as policy, effective dates, and coverage amounts. Schedule B commonly describes a list of exceptions of instances, as well as instances that can void an investors status. Having an owners policy when you purchase land or property ensures that your purchase is covered from all defects, liens, and other instances with the exception of what is underlined in the policies coverage.
Exclusions and Provisions:
There are exclusions and provisions in every title insurance policy. Exclusions and provisions are well documented cases lined out and explained in title insurance documents. Title insurance companies take proactive measures to make sure that insurance claims are made under qualifying conditions. They are not set in place to provide coverage for a issue that was never fully amended by a previous owner.
Nor will it provide coverage to circumstances where an investor failed to adhere to the rules and guidelines explained in the policy’s coverage. The owners policy provided when an investor is interested in acquiring land or property, becomes the main asset and tool needed when researching the fine lines of a property of interest. Every fact, regulation, and exception is provided in an owner’s policy manual. Taking time to understand all the litigation is imperative to having your claim run smoothly.