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Below
are answers to some commonly asked questions regarding title
insurance which we hope will assist you in determining your
title insurance needs. If you have any questions that are
not answered below, please contact us. |
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What
is title insurance? |
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Title
insurance protects against loss or damage resulting from defects
that affect the title to your home or place of business. |
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Why
is title insurance important? |
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Title insurance protects the investment
you've made in your home or place of business. When you buy property,
the previous owner conveys title to you to evidence your full legal
ownership. Occasionally, a hidden defect in the title or a mistake
in a prior deed, will or mortgage may give someone else a legal
claim against your property. If a claim is made against your property,
title insurance can save you time and money by:
- Providing a corporate guarantee
against insured defects;
- Paying all legal expenses to
eliminate any title defects;
- Paying any claim arising from
errors in title examination and recording; and
- Paying any loss arising from
hidden defects in title and defects not of record.
Your title insurance protection
is a permanent assurance that your ownership and use will be defended
promptly against claims, at no cost to you, whether or not the claim
is valid. |
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What
is a title defect? |
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A
title defect is one of any number of things that could jeopardize
your interest. It could be an unsatisfied mortgage, lien, judgment
or other unrecorded claim against the property. It could arise through
easements, use restrictions or other existing covenants, or it could
be a hidden risk. |
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What
types of hidden risks does title insurance protect against? |
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Title insurance generally protects
you against four kinds of hidden risks:
- Errors
in the public records such as incorrect
information in deeds and mortgages regarding names, signatures
and legal descriptions;
- Judgments, liens
and mortgages or any other
claims against the property or the seller which become the
new owner's responsibility after closing, such as unpaid
taxes, assessments and other debts to creditors;
- Claims to ownership
by the spouse of a former owner or by the "missing
heir" of a deceased owner who did not receive his share
of the estate; and
- Invalid deeds
or other transfers by sellers who did not actually own the
property or by previous owners who were minors or not mentally
competent.
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What
risks are not protected by title insurance? |
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Both
the standard owner's policy and the standard lender's policy
are based on an examination of public records of the recording
district in which the land is located. Neither policy insures
against matters that could be disclosed by actual inspection
or survey of the property. These policies do not insure against
certain matters not shown by the public records such as unrecorded
easements, liens or money obligations, unrecorded utility rights
of way, public or private roads, community driveways and other
types of encumbrances, or against the rights or claims of persons
in possession of the property which are not shown by the public
records. |
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Can
protection be obtained against matters not of record? |
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Upon
request, the title insurance company may agree to cover matters
that are disclosed by a physical inspection or a survey of the
property, subject to any exceptions that the inspection determines
to be proper. Due to the additional risk involved, a higher
premium may be charged for this type of coverage. This type
of coverage is called "extended coverage." |
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Who
does title insurance protect? |
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There
are two basic types of title insurance policies - one for the mortgage
lender and one for the real estate owner. If a mortgage is to be placed
on your new home or business, the lender will probably require you
to purchase title insurance to protect its position as a holder of
a mortgage loan, but this lender's title insurance policy doesn't
protect the real estate owner. You need to purchase an owner's title
insurance policy to protect your investment. |
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How
much does title insurance cost? |
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You
pay a one-time premium for coverage that lasts as long as you or your
heirs own your property, or as long as you may be liable for any title
warranties you make. Owners title insurance is one of the least expensive
forms of insurance. In many cases the owner's title insurance policy
can be purchased at a reduced rate when a lender's policy is also
purchased. Our
Rate Calculator can assist in determining the cost of Title Insurance. |
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When
is the title insurance policy issued? |
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The
owner's title insurance policy usually is issued after the deed to
the buyer is delivered and recorded. The lender's title insurance
policy is usually issued after the mortgage or deed of trust has been
properly executed and recorded. |
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What
is a title search? |
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A
title search is a detailed examination of the public records concerning
the property, including deeds, civil and probate court records, judgment
indexes and tax records. The purpose of a title search is to determine
the seller's right to transfer ownership and to discover any claims,
errors, assessments, mortgages or other burdens or restrictions on
the property. |
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What
happens if a claim is made against my title? |
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If
a claim is made against your title, you should notify the title insurance
company immediately, in writing, and include copies of all related
letters and documents. The title insurance company will either pay
the claim against your title, negotiate with the other party to settle
the claim or defend a court case related to the title. The company
will pay all legal costs incurred in defending your title. |
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What
should I look for in selecting a title insurance company? |
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You
should select a company that has a sound reputation for paying
claims, experience in all phases of title insurance, and efficient
and dependable service to policy holders. Central
Alabama Title Center, LLC and its underwriter have an outstanding record in all
of these areas, and can also offer you many other superior services. |
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