Real estate title insurance, also called simply “title insurance” is an American invention, whose use is widespread in that country, having gained special importance during the last century. Its current use extends to practically all countries in North, Central and South America in all types of real estate transactions, including commercial and residential.
Description of real estate title insurance
This is an indemnity contract covering risks arising from defects or vices that may be contained in title deeds, whether or not registered in a public land registry, which cause the insured damages. The coverage is permanent, for as long as the insured or his successors maintain an interest in the property. The insured or his successors maintain an interest in the property.
The title insurance contract is an indemnity agreement, since collaterally to a main transaction, which may be the purchase and sale or mortgage, the insurer is obliged to indemnify the insured in the event that the latter has any loss caused by actions brought by a third party. This obligation to indemnify contains an aspect of equity, since the indemnified party has the right of restitution, which is not the case with other types of insurance.This obligation to indemnify contains an aspect of equity, since the indemnified party has the right of restitution, which is not the case with other types of insurance.
Real estate title insurance in USA
There are standard policies for both owners and creditors of real estate, which are governed by the American Land Title Association (ALTA) of the United States. The insurance company is obliged to cure the defect, solve the problem in another way, for example by negotiating with third parties, or pay an indemnity, in order to protect the insured. In addition, the policy obliges the insurance company to manage and pay for the defense of the insured in case of a third party claim.
