How does Title Insurance work in North Carolina?

Title insurance in North Carolina, like in many other states, is a type of insurance that protects homeowners and lenders from potential financial losses or legal issues related to the ownership of a property. When you purchase a property, you want to ensure that you have clear and marketable title, meaning there are no legal claims or liens against the property that could jeopardize your ownership rights.

Here's how title insurance works in North Carolina:

1. Title Search: Before issuing a title insurance policy an attorney conducts a thorough examination of public records to determine the history and status of the property's title. This search typically involves reviewing deeds, mortgages, court records, tax records, and other relevant documents.

2. Identifying Issues: The title search aims to identify any potential issues that could affect the ownership of the property, such as unpaid taxes, liens, judgments, easements, or undisclosed heirs. These issues may create a cloud on the title, meaning there is uncertainty or potential legal problems related to the property.

3. Resolving Issues: If any issues are discovered during the title search the attorney works to resolve them before Longleaf  issues the title insurance policy. This may involve working with the parties involved, clearing outstanding liens, obtaining necessary releases or waivers, or addressing other legal matters.

4. Title Insurance Policy: Once the title search is complete, and any identified issues are resolved, the title company issues a title insurance policy. There are two types of policies: an Owner's Policy and a Lender's Policy.

  - Owner's Policy: This policy protects the homeowner and is typically purchased during the property acquisition. It provides coverage for the purchase price of the property and offers protection against losses due to title defects, such as forged documents, undisclosed heirs, or mistakes in the title search.

 - Lender's Policy: When obtaining a mortgage loan, lenders typically require a separate title insurance policy to protect their interests. The lender's policy is usually based on the loan amount and diminishes as the loan is paid off.

5. Coverage and Claims: Title insurance provides coverage for losses or legal expenses incurred due to covered title defects, subject to the terms and conditions of the policy. If a covered claim arises, the title insurance company will typically defend the insured party's interests in court and, if necessary, compensate for financial losses, such as legal fees or the reduction in property value.

It's important to note that title insurance is a one-time premium paid at the time of property purchase, and the policy remains in effect for as long as the insured party or their heirs retain an interest in the property. It provides peace of mind and financial protection against unforeseen issues that could arise from the property's title.

To obtain title insurance in North Carolina, it's recommended to work with a reputable real estate attorney experienced in real estate transactions. They can guide you through the process, conduct the necessary searches, and help secure the appropriate title insurance policies for your needs…

That’s where Longleaf Title Insurance comes in. We’re more than happy to assist you in your journey to homeownership whether it’s your first, or you purchased multiple times. We are ready to protect your investment, and answer any questions you may have. 

For more information, contact us!