What is a title?
A title is the right to ownership and possession of a home or property. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
What can make a title defective?
Any number of problems that remain undisclosed after even the most careful search of public records can make a title defective. You may not learn of these hidden defects for many months or even years after purchase.
What is title insurance?
Title insurance is the application of the general principles of insurance to real estate titles. But, unlike other types of insurance which protect the insured against loss due to unexpected future events, title insurance protects against loss which may have occurred in the past. Specifically, title insurance protects the buyer against loss resulting from previously unreported land title defects, insures against forgeries, claims by missing heirs, recording errors, etc.
Are there different types of title insurance policies?
In Texas, the two most common types of title policies are "loan policies," which protect lenders, and "owner policies," which protect property buyers. Most lending institutions will not loan you money to buy a house or other property unless you purchase a loan policy. This policy will repay the balance of your mortgage if a claim against your property voids your title.
What protection does a title policy provide?
A title insurance policy states that if you, as insured, suffer a loss as a result of title defects, the insurer will indemnify or reimburse the insured for loss up to the face amount of the policy and any related legal expenses.
How does Cherokee Title Company determine if a title is clear of defects?
Our abstractors conduct an extensive search of the public records to determine whether or not any adverse claims exist against the subject real estate. Any claims are either eliminated prior to issuance of a title policy, or their existence is not covered.
How much does title insurance cost?
The one-time premium, paid at the time of purchase of the property, is directly related to the cost of the real estate. The premium rates are set by the Department of Insurance. It provides coverage for as long as the insured owns the property.
Is title insurance regulated?
We are fully regulated by the Texas Department of Insurance under the authority of the Commissioner of Insurance. Under the law, the Commissioner sets and promulgates the premium rates. The rates must be reasonable to the public and non-confiscatory to the industry. In order to collect data on which to determine the property rates, the Commissioner may require companies to submit information such as loss experience or operation expense. Before the Commissioner sets a premium rate, and before title companies may charge such a rate, the Commissioner must provide reasonable notice and a hearing to title insurance companies, agents and the public. Hearings are scheduled biennially in even-numbered calendar years.