How Title Insurance Protects

What is Title Insurance?

Title insurance is a crucial safeguard for homeowners, providing protection against financial loss due to defects in a property’s title. Despite thorough research and due diligence during the purchasing process, issues can arise after closing that threaten the validity of the title.  Examining a possible claim will help illustrate how title insurance protects a homeowner.

An Example of a Dispute

One such example is a boundary dispute. Imagine purchasing a charming home nestled in a quiet neighborhood. Everything seems perfect until you receive a notice from your neighbor claiming that a portion of your backyard encroaches on their property. Suddenly, what was once a peaceful home becomes a source of stress and uncertainty.

How Title Insurance Protects You?

In this scenario, title insurance becomes your lifeline. You file a claim with your title insurance company, outlining the details of the dispute and providing any relevant documentation, such as surveys and property records. The title insurer then steps in to investigate the issue. After conducting a thorough examination, the title insurer may discover that an error occurred during the property’s previous transfer of ownership. Perhaps a survey was inaccurately conducted, or a boundary line was improperly marked. Whatever the case, the title insurer works to resolve the dispute and protect your ownership rights.

Possible Solutions

In some cases, the resolution may involve negotiating with the neighboring property owner to reach a mutually acceptable solution. This could include adjusting property lines or obtaining an easement to legally use the disputed area. In more complex situations, legal action may be necessary to clarify the property boundaries. Throughout the process, your title insurance policy provides financial coverage for legal fees and any potential loss of property value. Without title insurance, resolving a boundary dispute could cost thousands of dollars and months of uncertainty. Thanks to title insurance, you can rest assured that your investment is protected, allowing you to focus on enjoying your home without the added stress.

Reach Out to Federal Title for Specific Questions

Do you have a possible title issue?  Or just general questions on how your title insurance policy might help? Please feel free to reach out to one of our attorneys (attorneys@federaltitle.com) with your questions and one of our experienced attorneys will get back to you.