Title FAQ

Commonly Asked Questions

What is title insurance?

Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property. Each title insurance policy is subject to specific terms, conditions and exclusions.

Why Do You Need It?

To protect possibly the most important investment you’ll ever make – the investment in your home. With a title insurance policy, you as owner, have an indemnity contract that will reimburse you for loss in the event someone asserts a claim against your property that is covered by the policy.

Is it required?

Lenders title insurance is usually required to get a mortgage loan. Lender’s title insurance protects your lender against problems with the title to your property-for example, if someone sues to say they have a claim against the home. Lender’s title insurance does not protect your investment in the home (your equity).

What kind of problems can a title search reveal?

A title search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the seller and restrictions limiting use of the land.

What can make a Title Defective?

Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden “defects” are dangerous indeed because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property. These are just a few examples of what can make a title defective and why you need title insurance.

  • Documents executed under false, revoked or expired powers of attorney
  • False impersonation of true land owners
  • Undisclosed heirs
  • Improperly recorded legal documents
  • Failure to include rights in another not appearing of record and not disclosed by survey
  • Defective acknowledgments due to improper or expired notarization.
  • Mistakes and omissions resulting in improper abstracting
  • Forged deeds, mortgages, wills, releases of mortgages and other instruments
  • Duress in execution of wills, deeds and instruments conveying title
  • Errors in tax records

How much does Title Insurance cost?

The one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time only expense, paid when you purchase your home. Yet it continues to provide complete coverage for as long as you or your heirs own the property.

Why do I need to Purchase a new Policy when I refinance?

To the lender, a refinance loan is no different than any other home loan. So, your lender will want to insure that their new loan is protected by title insurance, just as the original lender required. Therefore, when you refinance you are buying a title policy to protect your lender.

When does Title Insurance protection begin?

It begins at the time and date of recording of the vesting instrument, which is generally either the deed (for an owner’s policy), or the mortgage (for a lender’s policy).

How long does coverage last?

A lender’s policy lasts until the mortgage is paid in full.  An owner’s policy remains in force as long as you or your heirs have an interest in the property.  If challenges to title arise after the property has passed to your heirs, the title insurance company would defend the title for them as it would for you.

How does title insurance protect my investment if a claim should arise?

If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense – and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy.

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