Page 26 - Homeowners Manual - Santa Clara County

Title Insurance

WHAT IS TITLE INSURANCE AND HOW DOES IT WORK?
To put it simply, title insurance is a way to protect yourself from financial loss and related legal expenses in the
event there is a defect in title to your property that is covered by the policy� Title insurance differs from other
types of insurance in that it focuses on risk prevention, rather than risk assumption� With title insurance, title
examiners review the history of your property and seek to eliminate title issues before the purchase occurs�
Title insurance also differs in that it comes with no monthly payment� It’s just a one-time premium paid at
closing�

Do I need title insurance?
Absolutely� Title insurance is a way to protect what is likely your largest investment — your home� An Owner’s
Policy provides peace of mind that your title company will stand behind you if a covered title issue or defect
arises after you have bought your home�

What does title insurance cover?
Any number of title issues may arise, even after the most meticulous search of public records� These hidden
defects are dangerous because you might not learn about them for months, or even years, after purchase�
Some common examples of risks covered by your Owner’s Policy include defects in title caused by:

• Improper execution of documents
• Mistakes in recording or indexing legal documents
• Forgeries and fraud
• Undisclosed or missing heirs
• Unpaid taxes and assessments
• Unpaid judgments and liens
• Unreleased mortgages
• Mental incompetence of grantors on the deed
• Impersonation of the true owners of the land by fraudulent persons
• Refusal of a potential purchaser to accept title based on the condition of the title

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