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Settlement Team

  • Home Inspector

  • Settlement Attorney

  • Termite Inspector

  • Title Insurance

WHAT IS TITLE INSURANCE?

Before answering "what is title insurance," it might be best to first answer "what is title". "Title" is the ownership in real property. Among other things, it means that you have the legal right to possess, occupy, peacefully enjoy and sell your property without interference from others, subject only to restrictions imposed by governmental authorities or previous owners. In most cases, title is transferred by deed, which is recorded in the land records of the county, in which the property is located. Generally, when property is sold, the title examiner goes to the record room and searches the land records for any title defects. A title defect is anything in the entire history of ownership of real estate which may encumber the owner's rights under the title. A title defect may cause the owner of real property to lose all or part of his land to a superior ownership interest or claim of another. This is the type of loss against which title insurance protects. In short, if you own a title insurance policy, the title insurance company will defend you, without cost, against an attack or claim upon your ownership interest in your property as insured and you will be protected against financial loss caused by a title defect. The title insurance premium is paid one time - at owners closing - and coverage extends to you for your protection as long as you own the property and even thereafter in some cases.

If my title has been examined, why isn't that enough?

There are many defects which even the most meticulous search of the land records will not uncover. For instance, it is impossible for an examiner to know whether the marital rights of all previous owners have been relinquished; whether all deeds, mortgages and judgments affecting the property have been properly indexed in the land records; whether all signatures are valid; or whether an unknown heir of a previous owner has a valid claim against the property. Without owner's title insurance, you may have no recourse for recovery from these types of problems.

If I am required to purchase Lender's insurance, why do I need Owner's coverage as well?

In almost every instance, a Lender will require you to purchase Lender's title insurance protecting it up to the value of its loan on the property. This coverage only protects the Lender, not you, and the coverage diminishes as the loan is paid off. As you build more equity in the property, you expose yourself to a higher risk of loss occasioned by a title defect. In this situation, the protected Lender will suffer no loss while you bear the substantial risk of the damage. Owner's title insurance will protect you against any covered loss from failure of title up to the full amount of the policy.


IMPORTANT REASONS WHY YOU SHOULD HAVE TITLE INSURANCE

Owner's Title Insurance will protect you against those hidden risks which would not be disclosed by even the most meticulous search of public records.

  1. Forgery.
  2. Fraud in connection with execution of documents.
  3. Undue influence on a grantor or executor.
  4. False impersonation by those purporting to be owners of property.
  5. Incorrect representation of marital status of grantors.
  6. Undisclosed or missing heirs.
  7. Wills not properly probated.
  8. Mistaken interpretation of wills and trusts.
  9. Mental incompetence of grantors.
  10. Conveyance by a minor.
  11. Birth of heirs subsequent to date of will.
  12. Incorrect legal descriptions.
  13. Non-delivery of deeds.
  14. Unsatisfied claims not shown on record.
  15. Deeds executed under expired or false powers of attorney.
  16. Confusion due to similar or identical names.
  17. Dower or courtesy rights of ex-spouses or former owners.
  18. Incorrect indexing.
  19. Clerical errors in recording legal documents.
  20. Delivery of deeds after death of grantor.

Survival Guide Ask the Lawyer
WHAT IS TITLE INSURANCE?
Before answering "what is title insurance," it might be best to first answer "what is title". "Title" is the ownership in real property. Among other things, it means that you have the legal right to possess, occupy, peacefully enjoy and sell your property without interference from others, subject only to restrictions imposed by governmental authorities or previous owners. In most cases, title is transferred by deed, which is recorded in the land records of the county, in which the property is located. Generally, when property is sold, the title examiner goes to the record room and searches the land records for any title defects. A title defect is anything in the entire history of ownership of real estate which may encumber the owner's rights under the title. A title defect may cause the owner of real property to lose all or part of his land to a superior ownership interest or claim of another. This is the type of loss against which title insurance protects. In short, if you own a title insurance policy, the title insurance company will defend you, without cost, against an attack or claim upon your ownership interest in your property as insured and you will be protected against financial loss caused by a title defect. The title insurance premium is paid one time - at owners closing - and coverage extends to you for your protection as long as you own the property and even thereafter in some cases.

If my title has been examined, why isn't that enough?
There are many defects which even the most meticulous search of the land records will not uncover. For instance, it is impossible for an examiner to know whether the marital rights of all previous owners have been relinquished; whether all deeds, mortgages and judgments affecting the property have been properly indexed in the land records; whether all signatures are valid; or whether an unknown heir of a previous owner has a valid claim against the property. Without owner's title insurance, you may have no recourse for recovery from these types of problems.

If I am required to purchase Lender's insurance, why do I need Owner's coverage as well?
In almost every instance, a Lender will require you to purchase Lender's title insurance protecting it up to the value of its loan on the property. This coverage only protects the Lender, not you, and the coverage diminishes as the loan is paid off. As you build more equity in the property, you expose yourself to a higher risk of loss occasioned by a title defect. In this situation, the protected Lender will suffer no loss while you bear the substantial risk of the damage. Owner's title insurance will protect you against any covered loss from failure of title up to the full amount of the policy.

IMPORTANT REASONS WHY YOU SHOULD HAVE TITLE INSURANCE
Owner's Title Insurance will protect you against those hidden risks which would not be disclosed by even the most meticulous search of public records.

I . Forgery.
2  Fraud in connection with execution of documents.
3  Undue influence on a grantor or executor.
4. False impersonation by those purporting to be owners of property.
5. Incorrect representation of marital status of grantors.
6. Undisclosed or missing heirs.
7 Wills not properly probated.
8. Mistaken interpretation of wills and trusts.
9. Mental incompetence of grantors.
10. Conveyance by a minor.
11. Birth of heirs subsequent to date of will.
12. Incorrect legal descriptions.
13. Non-delivery of deeds.
14. Unsatisfied claims not shown on record.
15. Deeds executed under expired or false powers of attorney.
16. Confusion due to similar or identical names.
17. Dower or courtesy rights of ex-spouses or former owners.
18. Incorrect indexing.
19. Clerical errors in recording legal documents.
20. Delivery of deeds after death of grantor.

  

 

Tip. Save money

Title insurance is 3.50 dollars per thousand on the purchase price for the lender and buyer's insurance. You can save yourself money if you have bought a house that the seller bought within 10 years by providing there is documentation from the previous insurer. The discount is 40% of the original insurer's premium. For example if the seller bought a house for $200,000 eight years ago and is now selling it for $300,000 the discount would be 40% of the premium for the $200,000 or $280 and the total premium would be $770.00. ($300,000x3.50- 40%200000= $780.00

Your savings would be $280 dollars