What is title insurance?
The word title is a collective term for all the legal rights to own, use, and dispose of land including all previous ownership, uses, and transfers. To legally transfer real property, a title search must be performed and, in most cases, the title must be found free of any circumstances that could endanger your right of ownership. Title insurance adds financial protection against the possibility of future loss should legal rights to a property be challenged.
Two of the most common types of title insurance policies are the owner’s title policy and the lender’s title policy. An owner’s title policy protects a purchaser for the full property value. A lender’s title policy protects the lender’s interest in the property for the amount of the mortgage loan. Although an owner’s title policy is generally optional, a lender will usually require a lender’s title policy to fund a mortgage loan.
What is a title search?
A title search is a detailed inquiry into and examination of all available public records on a property to verify the seller’s right to transfer ownership and to uncover any potential challenges to the title to the property. Additionally, a title search reveals items affecting the property such as unpaid taxes, unsatisfied mortgages, judgments against the seller, and restrictions limiting the use of the land. However, even the most diligent search may fail to reveal some hidden hazards, such as those mentioned earlier, which is why title insurance is so important.
Why should title insurance be purchased?
Purchasing real property is usually one of the biggest investments made by an individual. Homeowner’s insurance protects your investment against physical hazards like fire and theft, but it does not cover your most precious possession—the security of your title to the property. Title insurance is the only way to protect against a financial loss because of the title failing to be as represented to an owner/purchaser. For a one-time premium paid during the closing process, the title insurer assumes responsibility for defending the title to the property for certain challenges to the title. If the defense is unsuccessful, the title insurer generally reimburses the insured for any reduction in the value of the land.
What coverage does an owner’s title policy offer?
An owner’s title policy protects the owner’s interest in the property against such hidden hazards as:
▪ Mistakes in recording of legal documents.
▪ Forged deeds, releases, or wills.
▪ Undisclosed or missing heirs, including spouses
▪ Deeds executed by persons of unsound mind.
▪ Deeds executed by minors.
▪ Deeds executed under an invalid or expired power of attorney.
▪ Liens for unpaid taxes.
How long does title policy coverage last?
A lender’s title policy lasts until the mortgage is paid in full. However, an owner’s title policy remains in force as long as the insured or the heirs of the insured have an interest in the property. For example, if challenges to title arise after the property has passed to a property owner’s heirs, then the title insurance company would defend the title for them just as it would for the property owner.
What are the advantages of using Las Américas Title Policies?
Las Américas Title issues the Commonwealth and Chicago International Title Insurance Policy, which offers the following benefits not offered by many of its competitors:
▪ Coverage of title defects such as forgery, marital interests, unrecorded easements and survey matters.
▪ Assumption of the legal defense of the insured in a claims situation, which includes expenses and attorney's fees, independent of the insured amount for liability.
▪ Payment of covered claims can be paid in any currency and sent anywhere the insured elects (rather than requiring payment in the local currency of the Dominican Republic).
▪ Offers the insured the option of arbitration in controversies regarding title policy coverage.