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The title insurance business is an
indispensable component of the real estate and mortgage finance
business. Unlike a life insurance or property and casualty company,
which will assume risk in return for a premium, the title insurance
company and its agents will work with parties to eliminate all known risks
prior to completing the transaction. This process of risk
elimination is one of the most important services a title insurance
company and its agents provide. A buyer or a mortgage lender needs
to know that the seller or borrower is telling them the truth about what
they own. Lenders and their investors need to know that they have a
legally enforceable mortgage. A policy of title insurance eliminates
many financial and legal risks inherent in even the simplest real estate
transaction.
In addition to paying for any loss caused
by errors it makes in searching the public records or in interpreting what
it found, the title insurance company will pay any attorney fees incurred
in defending the title. There are also many risks such as fraud and
forgery which are covered by a title policy. Generally, the policies
remain in force for as long as the insured owns the real estate interest
covered in the policy and certain aspects of the coverage continue beyond
ownership.
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