Embarking on the journey of acquiring a residence is undeniably one of life's most thrilling endeavors, and safeguarding your newfound investment should be a top priority. Whether you're making a cash purchase or opting for a loan, securing both homeowners insurance and title insurance is highly advisable to ensure the enduring protection of your home.
While homeowners insurance safeguards against potential future events, title insurance protects against past occurrences that may be concealed or unknown. Both types of insurance carry significant financial implications for homeowners. Therefore, it is essential to explore the nuances of their distinctions to make informed decisions about protecting your investment for the long term. Everybody knows about homeowner’s insurance so we’re going to get you familiar with title insurance!
Policy Types
There are two primary categories of title insurance policies: lender's (mortgage loan) policies and owner's (free or purchase) policies. Typically, the responsibility for covering the costs of both policies falls on the home buyer.
Lender's Policy: This policy safeguards the lender's interest in the property. The coverage amount is typically equivalent to the loan amount, and as mortgage payments reduce the loan balance, the coverage amount also decreases.
Owner's Policy: Geared towards protecting the property owner, this policy covers up to the total original sales price of the property. Unlike mortgage policies, the coverage amount remains constant over time. Homeowners can enhance their coverage by purchasing an optional market value endorsement, ensuring the policy keeps pace with the property's value increases. In the event of a claim, the owner can recover the property's total market value. (Note: Owner's Policies may also apply to Leasehold Policies and Construction Loan Policies.)
Residential Title Insurance
Residential title insurance is a vital safeguard for both home buyers and mortgage lenders, shielding them from potential financial harm and complications arising from an imperfect title with defects. These policies comprehensively cover a spectrum of standard claims that may emerge against a property title, including unresolved liens, overdue taxes, and conflicting wills.
Various situations can give rise to title issues, casting a shadow on your rightful ownership of a property and classifying the title as 'bad.' These problems can emanate from diverse sources, from building code violations to intricate legal complexities. For example, discovering post-purchase that the seller lacks a legitimate claim to the property or that a third party disputes the seller's ownership rights is not uncommon. Title insurance is a protective stronghold against unforeseen title defects that could potentially jeopardize your investment and legal ownership. It offers peace of mind, ensuring that your property ownership remains secure even when faced with unexpected challenges.
The Closers Can Help
Situated in Hampton Roads, Virginia, The Closers of Virginia, LLC has been dedicated to meeting the state's title insurance requirements and providing associated services for an extended period. Our underwriting is overseen by Stewart Title Insurance, headquartered in Newport News, Virginia.
Renowned nationally, Stewart Title Insurance is a trusted partner recognized for its inventive product options, adaptable underwriting practices, competitive pricing, and unwavering commitment to integrity. Feel free to reach out with any inquiries, or call us at 757-595-4707 for a quote today!