Louisiana Title Insurance
For most Americans, their home is the largest single investment that they will make in their lifetime.
Buying title insurance to protect the basic proof of ownership (the title) is a relatively low-cost means of having peace of mind and ensuring that your commercial or residential title transfer is free of any defects.
At Southern Title, we issue a title insurance policy only after having thoroughly abstracted the property’s history at the courthouse.
What is Title Insurance?
Title insurance guarantees that no errors have been made in the title search and that there are no errors in the public records. Title insurance also protects against undisclosed title defects, that, no matter how thorough a search is made, cannot be discovered from the public records.
Some of the Title Insurance examples are:
- Fraud or duress in obtaining signatures
- Forged signatures
- False impersonation
- Errors of recording officials
- Misrepresentation of marital status
- Deeds by a corporation without proper legal authority
- Deeds by minors or persons of unsound mind
- Homestead rights of a spouse
- Undisclosed heirs
- Delivery of a conveyance after the death of the grantor
- Instruments executed under expired or revoked powers of attorney
Title insurance provides the safety net that national lenders require to make mortgages across the country with confidence. Local practices and activities differ across the US and any lender not familiar with those may be hesitant to make a loan without some type of protection — that’s where title insurance comes into play. It reduces the risks to everyone in the sale’s transaction.
For sellers, title insurance allows quick and easy closings, as he must prove to a buyer that he has title to his house with no liens or other encumbrances. The title insurance process requires a title search and insurance to the buyers in the amount of the sales price, which proves the validity of his title claim with an insurance guarantee.
When you have an insured property title you reduce delays when passing you sell your property. In the event of a challenge to your ownership claim, the rights of the insured are protected even if it means going to court; and if the claim is established, the loss is fully paid up to the limits specified in the policy.
An abstract is a history of the property title as revealed by the public records. Abstracts may contain errors and do not disclose “hidden hazards” that can threaten your property title if you do not have a title insurance policy.
If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy.
A lender’s policy, also known as a loan policy or a mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender’s interest from certain matters which may exist, but may not be known at the time of the sale. This policy only protects the lender’s interest. It does not protect the purchaser. That is why a real estate purchaser needs an owner’s policy.
An owner’s policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new home with a title policy.
Forged deeds, mortgages, wills, releases and other documents
False impersonation of the true land owner
Deeds by minors
Documents executed by a revoked or expired Power of Attorney
False affidavits of death or heirship
Deeds and wills by persons of unsound mind
Conveyances by undisclosed divorced spouses
Rights of divorced parties
Deeds by persons falsely representing their marital status
Defective acknowledgments due to improper or expired notarization
Forfeitures of real property due to criminal acts
Mistakes and omissions resulting in improper abstracting
Errors in tax records
Title insurance provides valuable protection for property buyers. Like all forms of insurance, however, it does not cover every conceivable problem and it is important to understand its limitations. Title insurance is based on examination of the county real estate records, and generally will not cover problems arising from facts outside of the recorded chain of title. One common problem not covered by title insurance is boundary line issues, which would be revealed by a survey of the property (for example, it turns out that your fence is actually two feet onto your neighbor’s property). Unrecorded mechanics’ liens and unpaid public utility bills are other examples. The title insurance policy will describe many of the situations it does not cover; these same limitations will generally be found in an attorney’s title examination. A qualified real property attorney can assist in helping a buyer understand the limits of a title policy and can take care of issues not covered by the policy.
There is no requirement to buy title insurance. But, realistically, most mortgage companies, banks, and credit unions will require title insurance to protect their interest in the property. However, it is recommended that you do purchase title insurance unless you have fully investigated the condition of title and are willing to accept the property with the liens and restrictions shown.
Not really. Title insurance rates in Louisiana are regulated by the state’s insurance commission and will not vary from one title company to another. However, slight variations in a title insurance quote can occur if a lower degree of coverage is offered. Premium amounts are based upon the purchase price and loan amount of the mortgage.