• What Is Title Insurance?
• Why Do I Need Title Insurance?
• 18 Reasons For Title Insurance
• Frequently Asked Questions

What Is Title Insurance?

Title insurance protects purchasers against loss in the event that the status of the title to a parcel of real estate is other than as represented. If the insured suffers a loss as a result of a title defect, the insurer will reimburse the insured for that loss and any related legal expenses, up to the face amount of the policy.

Title insurance differs significantly from other forms of insurance. While most forms of insurance protect you from losses that may occur due to unforeseen future events, title insurance protects you from losses caused by defects in the title arising out of events that have happened in the past.. To achieve this goal, title insurers perform an extensive search of the public records to determine whether there are any adverse claims to the subject real estate. Those claims are eliminated prior to the issuance of a title policy or their existence in excepted from coverage.

There are two main types of title insurance:

1. Homeowner’s Policy: A homeowner’s policy insures the owner of real estate against loss caused by defects or unmarketability of the owner’s title. A one-time premium is paid at the time of policy issuance and coverage lasts for as long as the owner and the owner’s heirs retain an interest in the property.

2. Lender’s Policy: A lender’s policy insures a beneficiary under a deed of trust against loss caused by the invalidity or unenforceability or a lien, or loss of priority of the deed of trust.

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Why Do I Need Title Insurance?

For many Americans, real estate is the most significant investment they will ever make. Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.

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18 Reasons For Title Insurance

• A deed or mortgage in the chain of title may be a forgery.
• A deed or mortgage may have been signed by a person under age.
• A deed or mortgage may have been made by an insane person or one otherwise incompetent.
  A deed or mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
• A deed or mortgage may have been made by a person other than the owner, but with the same name as the owner.
• The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
• A deed or mortgage may have been procured by fraud or duress.
• Title transferred by an heir may be subject to a federal estate tax lien.
• An heir or other person presumed dead may appear and recover the property or an interest therein.
• A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
• Title insurance covers attorneys’ fees and court costs.
• Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
• By insuring title, you can eliminate delays and technicalities when passing your title on to someone else.
• Title insurance reimburses you for the amount of your covered losses.
• A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
• Each title insurance policy is paid up, in full, by the first premium for as long as you or your heirs own the property.
• There may be a defect in the recording of a document upon which your title is dependent.
• Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced “wives” or “husbands.”

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Frequently Asked Questions

What is a Title?

A title is the evidence, of right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.

What can make a Title defective?

Any number of problems that remain undisclosed after even the most careful search of public records can make a title defective. The hidden “defects” are dangerous indeed because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in loss of your property.

If the Lender already requires Title Insurance, won’t that protect me?

Not necessarily. There are two types of Title Insurance. Your lender likely will require that you purchase a Lender’s Policy. This policy only insures that the lender has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it.

A Homeowner’s Policy, on the other hand, is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your homeowner’s title policy covers the full cost of any legal defense of your title.

How much does Title Insurance cost?

The one-time premium is directly related to the value of your home. It is paid when you purchase your home and provides complete coverage for as long as you or your heirs own the property. Click here for our rates.

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