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Q.What does a title insurance policy protect against?
A.Title insurance protects the buyer and mortgage lender from future claims that ownership of the property truly belongs to someone else. For example, a deed was forged such that someone else really has title to the property; or a seller in the chain of title sold the property without his wife’s consent or knowledge, such that she still owns a half interest in the property. Title insurance, however, typically only protects the buyer up to the limits of the purchase price of the property. So if a buyer purchases a home for $100,000, the buyer’s protection extends to that amount. If the house appreciates in value to $200,000 at the time the claim is made, the buyer’s protection is still only $100,000. Be sure to read the terms of the title insurance policy carefully so that you understand any coverage limitations.
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