What's the difference between title insurance and other types of insurance?

Title insurance protects you, the insured, from a loss that may occur from matters  or faults from the past. Other types of insurance such as auto, life, or health covers you against losses that may occur in the future. Title insurance does not protect you against any future faults, but does protect you from risks or undiscovered interests. Another difference is that you pay a one-time premium that remains effective until the property is sold. 

What is an owner's policy?

This policy protects the purchaser against loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new property with a title policy.

What is a lender's policy?

Lender's policy, also known as loan policy or mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of sale. This policy protects the lender's interest, not the purchaser's interest. This is why a property purchaser needs an owner's policy.

What does an owner's policy provide?

Protection from financial loss due to demands that may be charged against the title to your property, up to the cost of the title policy. Payment of legal costs if the title insurer has to defend your title against a covered claim. Payment of successful claims against the title to your property covered by the policy, up to the cost of the policy.

Why does a seller need to provide title insurance?

Any purchaser will need evidence that his investment in your property is free o title defects. The title policy that you provide the puracser is a guarantee that you are selling a clear title to your estate, unencumbered by any legal attachments that might limit or jeopardize ownership. It will reassure your purchaser that they are protected from any risk or losses and could help you close your deal. 

Why does a buyer need to title insurance?

Without title insurance, the buyer may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title. As a result, the buyer may be held fully accountable for any prior liens, judgments, or claims brought against their new property. If this occurs, the title policy insures that  the buyer will be defended at no cost against all covered claims up to the amount of the policy.

What is the cost of title insurance? Who sets the rates?

The Insurance Commission approves and controls the premiums for title insurance policies. The premiums are paid only once and the cost depends on the purchase price of the property and the policy amount must be equal to the purchase price.

What are title defects? What does title insurance protect against?

In some instances, even the most thorough search cannot absolutely assure that no title faults are present, despite the knowledge and experience of professional title examiners. In addition to matters shown in public records, other title problems may exist that cannot be disclosed in a search.  Potential defects include:

Liens or encumbrances

Unpaid taxes

Other parties having interest in the property, such as easements

Title fraud

Encroachments such as fences, boundary walls, and other improvements from adjoining property onto your property or from your property onto another property

Unmarketable title to the real estate

Setback violations

What happens if title defect is discovered?

In the event we identify there is an unacceptable lien, encumbrance or title defect we will immediately work to correct this; providing applicable legal advise that you may require should further negotiations become necessary. We got your back!