How Title Insurance Protects You

Every real estate purchaser must rely upon one of the following as evidence he or she has title to property: abstract, certificate, attorney’s opinion, or title insurance.

Some are better than others. And title insurance is the best of the lot. Look at some typical cases and compare.

Case 1

When a woman bought her home the recorded plat of the property showed all buildings to be well within the boundaries of her lot. Another survey at the time she bought confirmed the recorded plat.

When property adjoining hers was placed on the market, still another survey disclosed the fact that her garage and driveway were actually partly built on her neighbor’s land. She was fortunate enough to be able to buy a strip of land wide enough to bring her garage and driveway within the boundaries of her property.

WOULD SHE HAVE BEEN PROTECTED AGAINST THIS ADDITIONAL EXPENSE BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 2

A man inherited a number of pieces of property under the terms of his father’s will.

He lived out of town and had no further interests in the city in which the property was located, he sold all of it, stating in the deed that he was single.

A few months later, and after the seller had been killed in an accident, his wife from whom he had been separated and who had not been mentioned in her father-in-law’s will took action against all of the purchasers of property from her husband. She was claiming her interest in the property.

WOULD THE PROPERTY PURCHASERS AND LENDERS HAVE BEEN PROTECTED BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 3

A large but inefficient real estate developer was declared bankrupt. At the auction of his assets another developer bought a piece of property for speculation. He sold it at a profit to a builder who built a house on it and then sold the house and lot to a private buyer.

Soon afterward an out-of-town man with the same name and middle initial as the bankrupt man visited the area and asserted that the property was his. He had owned it for many years. Furthermore, he proved his claim.

The new “owner” had no title regardless of the number of times title had been transferred since the property was supposedly sold at auction.

WOULD THE OWNER HAVE BEEN PROTECTED AGAISNT THE LOSS BECAUSE OF FALSE PERSONATION BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 4

A young couple bought a house from a widow and her daughter, the only known heirs of the husband and father who had died without leaving a will.

Soon after the sale a man appeared claiming an interest in the house. He was the son of the widow’s husband by a former marriage. He had never liked the idea of his father remarriage and had dropped out of sight to make his own way in the world. Nevertheless he was entitled to his share of his father’s estate.

WOULD THE YOUNG COUPLE HAVE BEEN PROTECTED BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 5

In examining title to property being purchased by a client, an attorney missed a former mortgage recorded against the property due to an indexing or filing error in the clerk’s office.

WHEN THE LENDER STARTED TO FORECLOSE WOULD THE PURCHASER BE PROTECTED BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 6

In a title examination, an attorney overlooked a former mortgage recorded against the property. The old mortgage was not discovered until the statute of limitations had eliminated the examiner’s liability.

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 7

An individual bought a home from a man who held the power of attorney from an out-of-town property owner. The power of attorney was recorded and a careful examination showed it to be technically proper in all respects.

Not long after the sale, the property was claimed by a devisee under the will of the former owner. It was proved that the previous owner had died two days before the sale was made.

Even though the attorney had made a reasonable inquiry into the competency of the principal, he was misled to believe he was alive and well at the time of closing. The power of attorney, however, had expired with the principal’s death.

WOULD THE NEW PURCHASER HAVE BEEN PROTECTED BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Case 8

A property owner answered a want ad of a prospective purchaser. In payment, the purchaser offered the owner a $20,000 note secured by a mortgage on another piece of property. The seller accepted the interest-bearing note as payment.

When the note became due, it was discovered that the real owner of the property described in the mortgage had not executed either the note or the mortgage. Both had been forged by someone impersonating the actual owner.

WOULD THE VICTIM HAVE BEEN PROTECTED AGAINST FORGERY AND FRAUD BY:

	YES	NO
ABSTRACT		X
CERTIFICATE		X
OPINION		X
TITLE INSURANCE	X

Compare The Coverage

For the property buyer, title insurance is the only complete protection! An abstract is merely a history of the title as disclosed by the public records. An attorney’s opinion or certificate based upon his or her opinion is nothing more than the word “opinion” implies. In addition, the opinion is based upon an attorney’s examination of an abstract of the public records. It cannot go beyond that. Also, an opinion or certificate does not guarantee or insure the title.

None of these evidences of title affords protection against the unapparent errors or fraud in the execution of recorded documents or against misfiling or erroneous indexing of documents. Unlike title insurance, none of them goes beyond the record to protect against the multitude of dangerous details that are hidden from even the most astute title examiner.

If your home is worth buying, it is worth protecting against loss because of title defects.

There is nothing better than title insurance when you buy property. And no better title insurance than a policy issued by American Eagle Title Insurance Company.