What is title insurance?

Title insurance protects against the risk of the buyer’s ownership being subject to the claims of another.  A few examples of such claims are: outstanding liens against the property; delinquent property taxes from prior to closing; forged deed or release instruments; incorrect property description in the deed.   If a claim is brought against an owner over an insured risk, the owner must immediately notify the title insurance company.  The title company will step in and defend against the claim, and/or if the claim is legitimate and the owner suffers an insured loss, the title company must indemnify the owner against the loss. 

Should I buy title insurance?

Buyers should always purchase title insurance. Although percentage chances of having title issue are slim, the costs of dealing with such an issue far outweigh the one-time premium charged for title insurance.  

The answers given above have been prepared by the law firm of Jones & Walker, P.C. of Virginia Beach as general guidelines to common questions.  These answers do not constitute specific legal advice.  For a fuller explanation of many aspects of real estate sales and purchases, visit Jones & Walker’s website: www.jonesandwalker.com. 

When should I get insurance?

As soon as a contract is signed by all parties, the buyer should begin shopping for homeowner’s insurance, which will cover general hazards, such as fire, theft, and vandalism. The first year’s insurance premium will be collected at closing, so you typically do not have to pay the insurance premium prior to closing.  If the property is in a flood zone that requires flood insurance, you will need an elevation certificate prepared by a land surveyor in order for the insurance company to establish a price for the flood insurance policy. 

The answers given above have been prepared by the law firm of Jones & Walker, P.C. of Virginia Beach as general guidelines to common questions.  These answers do not constitute specific legal advice.  For a fuller explanation of many aspects of real estate sales and purchases, visit Jones & Walker’s website: www.jonesandwalker.com.