Title insurance is a standard practice that’s been around for decades and a required insurance you must purchase in order to close a real estate transaction. There are valid reasons why title insurance is important and very helpful, and in my opinion there are also reasons why we are due for disruption in this particular aspect of the real estate industry.
It’s a form on indemnity insurance that protects home buyers and lenders from financial loss sustained from defects in title of property or real estate, because the title insurance company does their research before they will issue title insurance, so in essence they are insuring that the title is clear and ready to be put into your name.
Like the handful of other insurances in our daily life, whether required or optional, we buy insurance policies hoping we never need to use them, for the obvious reasons, but also because it’s a well-known and sadly often proven fact, that whether we reliably pay our very costly insurance premiums month after month, decade after decade, the insurance companies still prefer to find loopholes to not pay out claims.
Title insurance is not an exception here, but you can google William Bymel vs Bank of America for an interesting case of the value of having title insurance when the insurance company comes through, as they’re designed to, on your behalf.
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