Depending on the type of policy issued, the policy may not cover increases in value. Protection is limited to the face amount of the policy, which is usually the market value of the property when it is purchased. The policies insure the property owner for as long as the property is owned, and potentially after the property is sold again. The premium for title insurance is paid when the policy is issued at closing. There are no annual premiums with owner insurance. Only an owner’s policy will protect the owner from personal loss, such as legal expenses for a dispute after the sale. Issues may include human error, unpaid liens, forged documents, undisclosed or missing heirs and incorrect legal descriptions. ■ Owner insurance protects the buyer from issues that might emerge after the close of sale. It also guarantees the lender to have a valid first lien against the property. ■ Lender insurance protects the lender against any loss that might occur due to unknown title defects.
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