When you purchase a home, you receive a document most often called a deed which shows the seller transferred their legal ownership or title to their home to you, Title insurance can protect you if someone later sues and say they have a claim against the home and before your purchase it. Common claims come from a previous owner’s failure to pay taxes or from contractors who say they were not paid for work done on time on the home before you purchase it.
Most lenders require you to purchase a lender’s title insurance policy, which protects the amount they lend. You may want to buy an owner’s title insurance policy from local title companies, which can help protect your financial investment in the home.
In this article, we will discuss what does title insurance policy cover in great detail.
- Building Permit Violation Coverage
Covers up to $25000 after a deductible equal to the the lesser of 1% of the policy amount or $5000. This coverage applies if the policyholder has to remove an existing structure build by a previous owber who did not obtain the requirred permits.
- Subdivision Coverage
Covers up to $10,000 after a deductible equal to the lesser of 1% of the policy amount $2500. National Default Title Insurance services provide this coverage that applies if the policyholder cannot close a sale, secure a loan or obtain a building permit because the land was improperly subdivided prior to purchase.
- Zoning Coverage
Zoning coverage protects if the policyholder is forced to remove or remedy an improvement because it violates zoning laws. Protection for forced remedy of violations is subject to a deductible and a amximum dolllar amounts.
- Automatic Coverage Increase
Each of the first five years, the policy amount will automatically increase by 10% in value, up to a total of 150%.
- Trust Coverage
Trust coverage extends the policy protection to include a trust that you create.
- Supplemented Taxes
This coverage protects against supplemental taxes for prrior construction, change of use or ownership.
These are some handful things that a title insurace policy will cover. Title insurace play a vital role when it comes to buying or selling a house. You have to buy a title insurance for your property. If your are a home owner, check out here to learn what are the things you need to know before buying a title insurance in great detail.