Luxury Homes Inc GMAC Real Estate Inc. 7000 W. Palmetto Pk. Suite 109 Boca Raton, FL 33433 Cell: (954) 461-1930

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Title Insurance

Title Insurance

Title insurance is a contract under which the policyholder (lender / buyer) is protected from losses arising from defects in the title. A title insurance company determines whether the title is insurable based on a review of the public records. If so, a policy is issued. Unlike other insurance policies that insure against future losses, title insurance protects the insured from an event that occurred before the policy was issued. The title company will defend any lawsuit based on an insurable defect and pay claims if the title proves to be defective.

After examining the public records the title company usually issues what's called a preliminary report. This describes the type of policy that will be issued and includes:

• Name of the insured party
• Legal description of the real estate
• Estate or interest covered
• Conditions and stipulations under which the policy is issued; and a schedule of all exceptions, including encumbrances and defects found in the public records and any known unrecorded defects.
• The premium for the policy is paid once, at closing. The maximum loss for which the company may be liable cannot exceed the face amount of the policy.

Types of Policies

The different types of policies depend on who is named as the insured. An owner's policy is issued for the benefit of the owner and his or her heirs or devisees. A lender's policy is issued for the benefit of the mortgage company. The amount of the coverage depends on the amount of the mortgage loan. As the loan balance is reduced, the coverage decreases. Because only the lender's interest is insured, it is advisable for the owner to obtain a policy as well.