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Is title insurance important?

On Behalf of | Sep 26, 2022 | REAL ESTATE LAW - Real Estate Law

If you have closed on a home before, you are likely familiar with the term, title insurance. However, title insurance is not a legal requirement, so sometimes, you may purchase a residential or commercial property without it. But, if there is a Macon, Georgia, title issue, title insurance can become extremely important.

What does it do?

Essentially, title insurance is insurance on your property’s title, which ensures that if someone has a claim to your land or home, the insurance policy will cover you. Without that insurance, you may be forced to pay off a governmental entity, an unpaid mortgage or you could even lose your house, should someone have superior title.

Ensuring clear title

One of the most important services that a title company does is a title search. This ensures that the property and home that you are about to purchase has a clear title. This means that you are purchasing the property from the person who fully owns the property. If not, the other owners will need to sign off as well.

Other claims

Unfortunately, a title search only finds what the county has on record, and sometimes, that record is not exhaustive, was not found or something that was reportedly resolved was not actually resolved. In these cases, you may get a letter stating that someone or an entity has a claim against your property, whether it is back taxes, mortgages, etc. If this happens, you simply forward the claim to your title insurance company who then negotiates a settlement to resolve the claim and quiet title.

Is it really that easy?

On paper, yes. In reality, probably not. Title policies are written with specific coverages, and a claim made against your home may not be covered by the policy. Or, it may be covered, but they simply do not want to cover it.

For example, they missed a million-dollar mortgage. Obviously, they will not want to pay such an amount, and the lender would rather just take the Macon, Georgia, property right now than settle for less cash. Property values are exceedingly high right now. This is when an attorney is likely needed, and even if you do not ultimately get title insurance, an attorney can still do a title search. A title search should be done on every property purchase to at least ensure that you have clean title.