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Archive for September, 2008

Insurance: Why You Need It, and How to Shop For It

Friday, September 26th, 2008

The buyer pays the premium at the time of closing. Title insurance protects against loss arising from problems connected to the title to your property. Before you purchased the house it may have gone through several ownership changes, and the land on which it stands might have gone through many more. There may be a weak link at any point in that chain that could pop up to cause trouble. For example, someone along the way may have forged a signature in transferring title. Or there may be unpaid real estate taxes or other liens. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.

Title insurance protects against losses arising from events that occurred prior to the date of the policy. Coverage ends on the day the policy is issued and extends backward in time for an indefinite period. (This is in stark contrast to property or life insurance, which protect against losses resulting from events that occur after the policy is issued, for a specified period into the future.)