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What You Need to Know About Title Insurance

What is title insurance?

Title insurance is your safeguard. It is a requirement of all real estate lenders. It is information on the status of title to the property and protection against adverse claims.

Why do I need title insurance?

When you purchase your home, you want it to be free of debt or obligations not created by you. Title insurance protects you, the buyer, against loss from past claims or disputes over ownership of property. Public records are searched for records, such as liens, judgments and easements, that affect the property.

What is the cost?

The title insurance premium is paid only once. The cost depends on the value of your property.

What if I have a problem?

If there is a dispute or claim made against your title as insured, the title insurance covers legal expenses for defending your title and the cost of settling the claim.

What are some common title problems?

A title policy covers the following common title problems:

  • Fraud and forgery
  • Lack of a legal right of access
  • Undisclosed or missing heirs
  • Errors: deed or legal documents not properly recorded
  • Undisclosed, but recorded, prior mortgage or lien
  • Invalid Deeds: transfer by former seller who did not actually own the property, or by former owner not mentally competent

Are there different types of title insurance policies?

There are two basic types of policies: the Owner's Policy and the Lender's Policy. The Owner's Policy protects the interest of the property owner and the Lender's Policy protects the interest of the lender or mortgagee.  The Owner's Policy is issued in the amount of the purchase price and insures the title to the property as long as you or your heirs own the property. A Lender's Policy insures the lender in the amount of the loan.