Q: How Does Title Insurance Protect Against these Hidden Risks and Defects?
A: Title insurance defends you in a lawsuit attacking your title and either corrects the title problem or pays the insured’s losses up to the amount of the policy. The policy also protects you after you sell the property for the defects occurring prior to your ownership that cause a loss to a purchaser if the title was warranted by you. The title policy guarantees that at the date the deed was filed for record placing title in the name of the insured, the title was free of defects apart from those excepted in the policy. The policy does not guarantee an actual amount of land. It guarantees that there are no buildings or other improvements belonging to someone else located on the insured land when an acceptable survey is furnished to the title company. An additional premium is paid to amend the standard survey exception.
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