What is title insurance and why do you need it?
In order to access your property's equity to obtain a loan or to sell or transfer it in the future, you must have clear, unencumbered
legal rights of ownership. Title insurance is your policy of protection against loss resulting from a claim against the ownership of
your property.
What does title insurance cover?
A title insurance policy is like a pre-paid legal agreement. The title insurance company will provide legal defense for any covered
claim against your property and will reimburse you financially for any losses resulting from hidden defects in your ownership
rights. Whether your property is a vacant lot or a historic site, it has likely had many previous owners. When the property
changes ownership or when it is used as collateral for a loan, these transactions are documented in the public records. Your title
company searches the public record for any problems that prohibit your clear ownership.
What are common claims against title insurance?
Claims against your property can happen for a variety of reasons. Below are some of the most common:
Fraud
Forgery
Defective deeds
Clerical errors in the records
Are there different types of title insurance policies?
Yes, there are two main types of title insurance policies, owner and lenders policies.
Owner's Policy
An owners policy protects the owner against any loss resulting from defects on the title, including another party's claim to
ownership of the property. Typically, the seller pays for this product as it insures the buyer is receiving clear title.
Lender's Policy
A lender's policy insures that the holder of a mortgage against a particular piece of real estate has a valid lien on the property and
protects the holder of the mortgage against loss from title defects. Typically, the borrower pays for this as it insures the lender's
mortgage position.
How does the title process work?
The title process begins with your title insurance company, who searches and examines public records to disclose the current
facts relating to the ownership of a particular piece of real estate including:
The property's current owner
Any liens or encumbrances against the property or its owner
Easements and/or restrictions
Other recorded interests
With this information, the buyer, seller, real estate agent, attorney, lender and settlement agent can work toward closing the
transaction. After the proper documents have been recorded, a title insurance policy is issued to the new buyer and/or their
lender.
How much does title insurance cost?
We charge a percentage of the purchase price,
based on rates filed with the division of insurance. The cost of title insurance
includes the title policy, title examination and the risk of insuring the property. The title insurance premium is a one time charge,
paid at the closing. Contact your account executive for a quote.
