What is Title Insurance?

An insurance policy protecting against loss should the condition of the title to the land be other than as insured.

Why do I Need Title Insurance?

When you buy a home, or any property, you expect to enjoy certain benefits from ownership.  For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you and to be able to freely sell or pledge your property as security for a loan.

What if I Have a Problem? Do I Have To Lose My Property to Make a Claim?

Not at all.  At the mere hint of a claim adverse to your title you should contact your title insurer or the agent who issued your policy.  Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle an adverse claim

Why do I Need Separate Title Insurance (Owners Insurance) from the Lender?

The lender's policy covers only the amount of its loan, which is usually not the full property value.  In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lenders ability to foreclose and recover its principal and interest.  In the event of a claim there is no provision for payment of legal expenses for the uninsured party (the property owner if they do not have separate coverage).  When a loan policy is being issues, the small additional expense of an owners policy is a bargain. 

Types of Issues that Arise that are Considered Title Issues and Risk which Are Covered by Title Insurance...

Standard Coverage handles risks such as:
  • Forgery and impersonation
  • Lack of competency, capacity or legal authority of a party
  • Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
  • Undisclosed (but recorded) prior mortgages or liens
  • Undisclosed (but recorded) easement or use restrictions
  • Erroneous or inadequate legal descriptions
  • Lack of right to access
  • Deed not properly recorded

Extended coverage policy covers additional defects such as:
  • Off-record matters, such as claims for adverse possession or prescriptive easement
  • Deed to land with buildings encroaching on land of another
  • Incorrect survey
  • Silent (off-record) liens such as mechanics liens or estate tax liens
  • Pre-existing violations of subdivision laws and zoning ordinances
Some policies may also cover the following risks depending on your locale - ask for details:
  • Post policy forgery
  • Forced removal of improvements by a neighbor onto insurance land
  • Location and dimensions of insured land
Feel free to call us for a free copy of "70 Ways to Lose Your Property" which outlines known types of title issues that could arise.

Useful information for homebuyers, whether you are purchasing a second home, replacement home, investment property or are a first time home buyer, you will find these reports helpful in answer your questions about the real estate title, escrow and settlement process.