Formulation of Title Insurance
The property which has been obtained by a conditionally registered document, that legal right is known as the title. The title is not constant as it changes by the change of property. However, at some period between the transfer of property few deficiencies may be found. As the changes of a property increase, the defect also tends to increases. The real estate market are going through this a lot. The base on which all the disputes are formed is on the maxim of law that states “Nemo dat quod non habet”. The maxim means a valid title cannot be transferred by a faulty title holder to his purchaser. From here, the title insurance is formulated.
Title insurance does not resemble other insurances. This is an insurance of indemnity that has a retrospective effect. In this type of insurance, the insured is indemnified by the title insurance against all the losses he/she suffered due to defects in real estate property. The best thing about this insurance is that the policy will be valid even on the prior date of the policy.
Every buyer wants a clear title in each transaction of real estate and the right to know about the hindrances related to property. The title insurance has been often practiced in India but in other countries like Canada, Australia, the United Kingdom, etc is widely used. As per the Saya Gold Avenue High Court, every party must go through all the details and documentation of real estate property.
On what grounds title insurance can be useful?
- When there is holding of property by another party.
- When there is an involvement of fraud or forgery as well stations the wrong stamp on the document.
- The party has defective records or data.
- When the party is going through some pending lawsuits or liens against the real estate property.
Different kinds of title insurance:
- Title insurance policy of the lender: All borrowers must buy a title insurance policy of the lender to protect them in case the seller is not able to move the ownership rights. This policy helps the lender by assuring them against the losses.
- Title insurance policy of the owner: The financial loss of the owner remains fixed so the owner needs a policy called the title insurance policy of the owner. This will protect them against losses and flaws in the title.
Cost of title insurance
You can ensure your real estate from the title insurance underwriters such as “Fidelity National Finance”, “First American Title Insurance Company”, “Old Republic National Title Insurance Company”, and “Stewart Title Guaranty Company” are some great title insurance underwriters. The cost of the insurance wholly depends on the location, types of insurance, and the amount of the real estate. However, the title insurance costs somewhat between $600 and $3400 which depends on the matter we have discussed earlier.
Reason to purchase title insurance
If you do not have title insurance then you may face huge problems regarding real estate transactions or due to defects in the title. Suppose a buyer searches for his house to find outstanding real estate taxes from the earlier owner. But, the monetary claim of the outstanding taxes remains with the buyer because of the absence of a title insurance policy. As long as the buyer holds or has a concern in the real estate, the title insurance policy will protect the buyer till then only. Moreover, when we talk about the title insurance policy of the lender, then, they only cover the banks, unregistered access rights, unregistered charges of other mortgages, and further defects.
Conclusion
To conclude, insurance is of various types be it life insurance, health insurance, general insurance, or title insurance, they are available on both platforms online and offline. You just need an insurance agent who will help you to purchase a policy form or you can also download it from the websites.
Also Read: How do you choose a real estate agent?
