Identity Theft Is Never Fun. Protect Yourself with Title Insurance.

By Kevin Shirley, Associate Broker (DC), ASP, GRI, e-PRO

Identity theft can cause you huge problems and may even lead to you losing the title of your home. That’s why you need to take preventive measures to protect yourself and your family.

Title insurance is a type of insurance coverage that can help you deal with issues arising from problems with your title. These can be existing issues that you did not know about or new ones brought on through fraud and identity theft.

In the age of information, the threat of identity theft is becoming increasingly real and pervasive. Hackers, phishers, and other nefarious thieves can break into our systems in multiple ways, pilfering vital private information, which can then be used to cause a financial disaster for unwitting victims. Luckily title insurance exists, offering you some protection and assistance against these fiends and their attempts to steal the value of your home.

Financial loss

There are many ways that identity theft can cause financial loss and damage to property. By assuming the role of a person who has legal ownership of a property, they can receive money for its sale without having the right to legally transfer it. They can also steal the owner’s identity to illegally refinance a property for personal gain. These are difficult problems to combat, and without assistance, they can lead to financial ruin.

With title insurance, both the lender and the homeowner are protected against this damage and sometimes even get compensation to help pay for costs associated with identity theft issues. A company like First Canadian Title will act as a shield against these issues, giving you a barrier that can be important when title issues rear their ugly head.

While title insurance is not required in every location, it is still a vital precaution that must be carefully considered if you are a homeowner. By discussing this with your lawyer, your broker, and an agent, you can learn about the available protection. That will give you all of the information you need to make an informed decision about purchasing this extra level of protection.

Title Fraud

The main thing that title insurance will protect you against is title fraud. This is where a person or entity can use stolen personal information or forged documents to get the title of the property transferred to their name. This is often done without the real owner, even knowing that it is taking place. The criminal can then get a mortgage on your house and vanish with the money, leaving you, the victim, responsible for paying the mortgage that you didn’t apply for.

Types of Title Insurance

Two major types of title insurance can be purchased by someone looking to buy a home. The first is an owner’s policy that will protect the person who has ownership of the title against unknown issues, fraud, and damages that can arise due to identity theft.

It is also possible to purchase a lender’s policy. That is a plan that protects the financial institution offering the mortgage from loss or damages that can arise if it becomes impossible to collect on the value of the loan made due to a defect or problem with the title. In most cases, a lending company will purchase title insurance to protect themselves from these potential hazards.

Identity theft leading to problems with titles and mortgages is becoming an increasingly common issue. Anne Swarbrick of Burlington, Ontario, spoke about her own situation in an interview with the Global News Wire. She says, “Two years ago, we began receiving collection notices to an unknown name at our address. As returning all earlier mail marked “addressee unknown” hadn’t worked, my husband hand-delivered the envelopes to the relevant banks with explanations. Regardless, a collection agency began to call. It took a lot of talking to convince the investigator that we had no connection to this now-apparent fraudster. Once convinced, this knowledgeable gentleman encouraged us to report the situation to the police. He and the police educated us about identity theft and how close we had been.”

Protect Your Personal Information

The effect of identity theft of titles can be hazardous for retired people on fixed incomes. Often their homes will represent a significant portion of their assets. If they lose that equity or suddenly find themselves in debt due to fraud, it can destroy the rest of their financial lives. Unfortunately, these people are also those who are most prone to attacks from hackers and phishers using technology to steal innocent victims’ identities.

It’s always important to be very careful with your personal information. Bank statements and other pieces of hard mail that have account numbers on them should be shredded as soon as they are no longer needed. It is also essential to avoid phishing scams online and not fall for fake emails or communications from people looking to collect information about you. Unfortunately, you simply can’t trust anyone unless you personally know them, and even then, you should keep your most vital personal data close.

While it is a dangerous world out there, purchasing title insurance can give you an ally in the battle against identity theft. The services of companies offering this coverage typically include compensation for loss, protection against future damage, as well as assistance in recovering from an identity theft attack.