What does title insurance cover?
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What does title insurance cover?

On Behalf of | May 26, 2021 | Blog |

Purchasing a new home is an exciting time for North Carolina residents, and many believe that the stressful parts are over once they sign the title. However, there are circumstances in which a prior owner may have claims to your title that you did not know about. 

In North Carolina, title insurance can protect homeowners by assuring ownership and protecting you from potential losses should the title have claims still attached to it. 

What does insurance cover?

There are some defects in titles that homeowners may not know about before signing the deed. These hidden defects are often missed in title examinations, which a title company performs before closing on a property. In such cases, title insurance protects them from financial loss due to the following: 

  • Forged deeds 
  • Undisclosed heirs 
  • Unpaid child support liens 
  • Clerical errors 
  • Unrecorded easements 

These are just some of the several issues that title insurance covers, so it is important to purchase coverage before this type of situation comes to light. 

What is not covered?

Any issues that you knew about before signing closing documents are not covered by title insurance, as well as any problems that you create yourself. Some of the other risks not typically covered include government condemnation, restrictive covenants and zoning ordinance violations. 

Dealing with title disputes after finalizing the purchase of a home can become a big headache. The extra cost of title insurance may feel like too much of an added expense, but it can pay off significantly should a bad situation arise.