Title Insurance Frequently Asked Questions

Unlike most insurance products that protect against future events, title insurance safeguards against loss that may arise from hazards and defects that already exist and affect your legal claim to the property you are buying. In order to determine the existence of such hazards and defects, a search and examination of the public records is made by industry professionals who trace the chain of property ownership. This search helps identify title problems that may be discovered from reviewing the public records. However, mistakes in the search process can be made and even the most thorough search cannot assure that title hazards don't exist. 

• Errors: Documents that are misindexed in the public records due to a clerical mistake or documents misplaced before being properly recorded
• Unknown heirs: Legitimate heirs that may have been overlooked in the probate process or an heir thought to be deceased who may have a claim to an interest in the property
• Forgery: Forged deeds, releases of mortgages, and other documents in the public record
• Fraud: Deeds made by persons claiming to be single but, in fact, are married or by individuals falsely impersonating the true power
• Easements: Unrecorded easements that provide access for the construction of roads or utility lines at a later date

Two types of title policies are available: lender's titles and owner's titles. 

The homebuyer is required to purchase a lender’s policy because it secures the lender’s interest. This policy is commonly issued in the amount of the mortgage loan and coverage declines as the loan is slowly paid off. However, a lender’s policy does not extend to the homeowner. 

This is why an owner’s policy is available, which covers the homebuyer’s financial interest. Unlike the lender’s policy, the amount of protection provided to the homebuyer is the sales price of the transaction, so the total amount of your investment is fully protected.

Purchasing a home is one of the largest single investments you’ll make in a lifetime. That’s why it is of paramount importance that you safeguard the security of your investment from the financial loss which can occur through title defects. Considering the substantial cost of buying a home today and the minimum cost of title insurance, an owner’s policy is one of the wisest investments to protect you and your family against avoidable financial loss. 

A title insurance premium is paid only once at the time of purchase, and your policy continuously protects you and your heirs for as long as you own the property.

You’ll never know what the future holds, but with an enhanced policy, you’re protected from many situations that could lead to financial loss. Unlike traditional title insurance products that insure back in time, this policy provides comprehensive coverage for specific occurrences that take place in the future. The insurance coverage increases by 10% of the policy amount per year for the first five years of coverage up to 150% of the original amount. Enhanced coverage acts as:

• Insurance against violations of building restrictions by existing structures, which leads to forced removal
• Insurance against actual loss arising from the prohibition of the premises being used as a single-family dwelling due to zoning laws
• Insurance against subsequently arising mechanics’ liens on work performed prior to the policy date