Buying owner’s title insurance can be one of the smartest decisions a homebuyer makes. The policy can protect your interest in the home if there is a claim against the title. However, before using the coverage, you should understand the title insurance claims process.
This post will cover some of the points you need to understand about filing a title insurance claim.
Let’s start by considering claims against a property title. When a person or entity files a claim against your title, it means they are claiming a right to it. It could be from property taxes a previous owner left unpaid or liens against the title. It is also possible that an unknown heir might come forward to claim they have a right to the property. Title errors or mistakes during closing can be other issues.
Working with a title company will help you avoid these problems in most transactions. However, even the best professionals can miss specific details that may be obscure for one reason or another. Having title insurance ensures protection if this occurs. Without title insurance, the homeowner must defend and pay these claims alone. Under the worst circumstances, they might lose the property.
Initiating a title insurance claim is usually simple. You need to find your policy paperwork and call your insurer. Have the policy and personal information ready to provide to the agent. You should also have any documents sent by the claimant. The insurer will want to know the reason for the claim. Contact your lender if you need help finding your policy or making a claim. They should be able to help.
Insurers handle most title claims without asking much from the homeowner. They have lawyers and usually negotiate a settlement to resolve the matter. The policyholder reports the claim, and the title company takes it from there.
For example, let’s say the previous owner had unpaid taxes. The government might make a claim against the property. If you have title insurance, the insurer will pay the debt. The same could be true with other types of unpaid liens.
However, some issues can be more complicated. For example, a person or entity might claim a right to ownership. The insurer will try to negotiate a settlement that allows the policyholder to keep the property. The claim may go to court if they can’t reach a settlement.
As the claim gets harder to resolve, the process may require more time and attention from the homeowner.
Title insurance is well worth the additional expense when buying a home. Defending a title claim can be expensive. Paying off liens or debts can also be costly.
Contact the team from Title Group of Tennessee to learn more about title insurance. We are property title experts offering a range of services for closing real estate deals.
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