The Differences Between Title Insurance & Abstracting Services
An "abstract company" and "title insurance" are both concepts related to real estate transactions, specifically focused on ensuring the legitimacy and ownership of a property. However, they serve different purposes and involve different processes.
An abstract company, often referred to as an "abstractor" or "abstract and title company," is a specialized entity that performs a detailed examination of a property's history and legal records. The goal of the abstract company is to create an "abstract of title," which is a comprehensive document summarizing the chain of ownership, liens, encumbrances, and other relevant information related to a property.
The abstract of title provides a historical overview of the property's ownership, tracing back through all relevant transactions and legal events. It helps potential buyers, lenders, and other parties involved in a real estate transaction to understand the property's ownership history and identify any potential issues or discrepancies that could affect the sale or use of the property.
However, an abstract of title does not provide any form of insurance or guarantee against defects or claims that may arise after the property is purchased. It is essentially an informational document that assists parties in making informed decisions.
Title insurance, on the other hand, is a type of insurance policy that offers protection against financial loss due to defects, disputes, or claims that might arise in the property's title after a real estate transaction is completed. Title insurance is typically purchased by the buyer and/or lender as a way to safeguard their interests in the property.
There are two main types of title insurance:
Owner's Title Insurance: This policy is purchased by the property buyer and provides coverage for issues that might arise with the property's title history, such as forged documents, undisclosed heirs, missing heirs, errors in public records, or undiscovered liens.
Lender's Title Insurance: This policy is typically required by the mortgage lender to protect their financial interest in the property. It covers the lender against losses due to title defects that could impact the lender's lien position or the validity of the mortgage.
Title insurance offers a level of protection that an abstract of title does not. If a covered title issue arises, the title insurance company will work to resolve the problem, potentially compensating the insured parties for financial losses incurred as a result.
In summary, an abstract company provides a detailed history of a property's ownership and legal records, while title insurance offers financial protection against potential title-related issues that could arise after a real estate transaction. Both are important components of ensuring a smooth and secure real estate transaction, but they serve distinct purposes.
List Of Nationwide Title Insurance Companies:
Fidelity National Title Group
First American Title Insurance Company
Old Republic Title Insurance Group
Stewart Title Guaranty Company
Chicago Title Insurance Company
Commonwealth Land Title Insurance Company
WFG National Title Insurance Company
North American Title Insurance Company
Investors Title Insurance Company
Westcor Land Title Insurance Company
List of Nationwide Abstractor Companies
GET EXPERT REAL ESTATE CLOSING NOTARIES