Title Insurance is protection against loss if a covered defect is found in your title. A Title Insurance policy assures repayment of your Loan up to the face amount of the policy in the event of a successful claim against title to the property.
Who is Covered by Title Insurance?
A Loan Policy covers the Lender. It protects the amount of money they loan to purchase the property, and assures repayment of the loan up to the face amount of the policy in the event of a successful claim against title to the property. An Owner’s Policy covers the buyer for any claims against their home. It provides maximum assurance of protection from “hidden risks”, secure ownership, free from financial loss due to troublesome claims that may be asserted against your title, quicker transfer of the property next time it is sold, and full payment of all legal costs to defend a title and payment of all successful claims against it up to the face amount of the policy.
What Risks Are Covered?
1. ERRORS: Incorrect information in deeds, mortgages, publice records, etc., such as a wrong name or a wrong description.
2. LIENS: Claims against the property or the seller which becomes the new owners responsibility after the sale. Examples are unpaid mortgages, taxes, sewer and water assessments, and bills owed to workers or other creditors.
3. CLAIMS TO OWNERSHIP: For example, a claim to “marital interest” by the spouse of a former owner or by a child of a former owner who was not mentioned in his or her parents’ wills.
4. INVALID DEEDS: For example, transfer by a previous seller who did not actually own the property, or by a previous owner who was not mentally competent.
How Much does Title Insurance Cost?
The buyer pays a one-time premium which varies from state to state. Check with your lender, attorney or title company for costs in your area. In some areas, costs are shared by buyer and seller.
If you have any other questions or concerns regarding title insurance, please don’t hesitate to contact our office.