When it comes to purchasing a property, the hope is always that the transfer of ownership will go smoothly, and stay that way for as long as the new owner decides to keep the property. However, there have certainly been instances where homeowners have been thankful that they took out a title insurance policy, as there are a number of snafus that can result in the need to submit a title insurance claim for reimbursement.
Here is a list of the 8 most common title insurance claims:
- Closing errors
- Searching errors
- Boundary and survey issues
- Easement issues
- Recording problems
- Fraud and forgery
- Access
- Mechanics liens
Closing and searching errors are mistakes that a good title company can help catch before it’s too late, which is why it’s so important to make sure your title company doesn’t cut corners or rush their work, even if it makes for a faster closing. It’s never worth it to trade quality for speed on such an important and expensive investment!
Closing errors can stem not only from incorrect legal descriptions and signatory errors, but also from failure to pay:
- Assessments
- Taxes
- Municipal liens
- Payoffs for prior mortgages or judgements
- Lines of credit (this is slightly less common)
Meanwhile, searching errors can lead to claims that include:
- Missed deed or break in chain of title
- Missed tax liens
- Missed judgements
- Prior mortgages
- Heirs or probate defects
- Examining or abstracting error
Forgery, identity theft, and wire fraud are some of the biggest contenders for fraud claims, with criminals pretending to be either the seller or another involved party to scam buyers out of their money. A vigilant title company can help spot some of the tell-tale signs of illegal activity, but in the worst case scenario where the criminal is just a little too good at their job, a title policy can help cover any losses.
It should be noted that not all claims are covered, and are subject to the terms of your title insurance policy. Recording problems, fraud/forgery, access, and mechanics liens are all issues that title policies are designed and intended to cover, but only make up about a quarter of the claims.
Make sure to review what the covered risks are, and whether the asserted title defect falls within an exception or exclusion in the policy. One way or the other, your title company and their underwriter will address whatever the issue is.
At Title Junction, we care about helping you stay informed throughout your real estate transaction. The experts at our title company have extensive knowledge about real estate not only in Cape Coral and Fort Myers, but all of Florida as well.
Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: What Does Your Fort Myers Title Company Do?