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PROPERTY TITLE INSURANCE: DON’T LIVE IN HOME WITHOUT IT

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When it comes to title insurance, don't "live" in home without it. Under the worst of conditions, title insurance may be the only thing that stands between you being in your home or out on the street. Title insurance is an almost self-descriptive term: insurance protecting an owner of property against any unforeseen claims on the title of a property.

Imagine, you've been in your home for two years and all of a sudden a long lost relative of the old seller shows up. He claims that the seller had no right to sell the property without his approval. Without title insurance you are headed for a court battle. And, if the interloper wins, you could be out of a house and all the money you put into it, plus you would still be liable for the mortgage. Ouch!Former spouses, former owners, relatives of deceased former owners and contractors (who have not been paid for their work on a house) are but a few of the common parties that can attack your rights of ownership in your property.

"With title insurance you can virtually sit back and relax, because the title company will defend you and your property rights," said Edward Q. McCarthy, vice president and marketing director of Chicago Title Insurance Co., the nation's largest title insurer. "Title insurers research the history of a property's ownership to make sure that when you do buy, you are getting the property free of any unknown problems, or defects in the title."

If the title company goofs, which happens on rare occasions, and the interloper's claim is correct, the title company will make good on any loss that you may suffer.

Title insurance is inexpensive. "Title insurance charges vary from state-to-state and sometimes from county to county, but are a typically small fraction of the total sales price of the house," said McCarthy.

In the Chicago area title insurance typically costs $3.80 per $1,000 of sale price, or less than one half of one percent. In other words, property bought for $150,000 would carry a one-time insurance premium of $570. Title insurance premiums are paid in one lump sum premium at closing when you buy the property.

Of the major metropolitan areas, resident of Houston and Dallas pay the highest title insurance premiums at $8.63 per $1,000 of selling price. Elsewhere you can expect: New York City: $8.02, other New Yorkers pay $7.54, in Atlanta: $6.33, in Boston: $6.67, Detroit: $6.00, Los Angeles: $4.97, Philadelphia: $6.72, and $8.63 in Washington, D.C.

For years people have had the right to choose their title company, but few have.