Title insurance is a very unique product in the insurance industry. It is the only form of insurance that functions in reverse. Title insurance protects your title to your property from the date that the policy is issued BACKWARDS in time. This is because the purpose of title insurance is to insure you, the property purchaser and owner, against that which may have occurred prior to your purchase of the property but of which you have no knowledge. When it is discovered that someone else claims an interest in your property after you have already closed on your purchase, your title insurance covers your risk because their claim is based on an interest that they are asserting in the property that arose in the past, before you bought it. The policy grants protection against financial losses arising from a variety of problems that are commonly referred to as title defects, connected to the title to your property, or the land itself. Title insurance is like a security fence around your residence, protecting it against outsiders attempting to make a legal claim against your property such as defective recordings of prior Maryland or Pennsylvania land instruments, forgery, fraud or duress in the execution of a prior Maryland or Pennsylvania deed, undisclosed restrictive covenants that prohibit you from using your property fully and freely as you had anticipated, or unpaid liens. These are just a few of the title defects that are covered by your Maryland Title Insurance Policy.
Before you purchased your Maryland, it may have gone through a number of ownership changes, and the land on which it is located likely was conveyed many more times. Lenders obtain a security interest in your property in the amount of the loan at the time that you purchase it. A lender's security interest is only as good as the underlying asset; that is, your property. If your title to the property is defective, their security interest may be worthless. This is why ALL lenders require title insurance to protect their interests. As a buyer, and future owner, you should have the same concern and take the same wise precaution. A Maryland or Pennsylvania owner's policy is issued simultaneously, for a small additional charge, with the lender's policy, which you are already required to purchase, and therefore the most economical method to protect your interest is to obtain an owner's policy at settlement.
You may never file a claim for your Maryland property, but if you need to, title insurance will help protect your investment while saving you from potential legal expenses. A defective deed based on one of the described risks will destroy your interest in your property, and your financial investment, just as surely as a storm would destroy the structure. You obtain homeowner's insurance to protect against the storm, so it only makes sense to protect yourself against the title risks as well.
Your Maryland title policy, combined with your homeowner's policy, provides maximum protection against the variety of claims or hazards that you may encounter, whether thay be in the form of wind damage or a defective deed.
Title defects include things such as:
- Clerical errors in recording legal documents
- False impersonation by those purporting to be owners of property
- Fraud in connection with execution of documents
- Inaccurately executed and/or recorded deeds
- Inadequate surveys
- Incorrect indexing
- Incorrect legal descriptions
- Mistaken interpretation of wills and trusts
- Non-delivery of deeds
- Undisclosed or missing heirs
- Unsatisfied claims not shown on record
- Wills not properly probated
Excalibur Title and Escrow can help you construct that security fence around your home. Call or email one of our professionals today!