Commonly Asked Title Insurance Questions

Why do I need title insurance?

A real estate purchase is usually one of the best investments you can make. A home is probably the largest single purchase you will make. You protect your property against fire and other casualty damage with homeowner’s hazard insurance, but what about protecting your title? Title problems are defects that occur before the date of the policy and reveal undisclosed until sometime later. Even the most thorough and accurate searches of the public records cannot reveal these hidden hazards which could damage the sale of your property, make it unmarketable or even cause you to lose your property. Title insurance covers defects in the title prior to when you purchased your property.

How long is my title policy good for?

The Owner Policy is valid from the time your policy was issued until you sell your property or transfer deed – be that one year or twenty years of ownership. The Lender Policy is valid through the life of the loan. A Lender’s Policy may be passed to another lender/mortgagee through an assignment of the loan, however is not assignable should you refinance the property. A new Lender Policy must be issued at that time. An Owner (or Fee) Policy is non-transferable. The new owner will be required by his/her lender to purchase a new policy at that time; the new owner may elect to insure the property with a new policy issued in his/her name.

Why do I need another policy if I provided one for the loan?

You are not insured by your Lender’s Policy. A one-time premium protects your property from actual loss resulting from risk covered by your policy, up to the amount of the policy. Your Fee or Owner Policy may also provide for legal defense costs should a claim arise, unless specifically excluded from your policy. Typically, the Lender and the Owner Policies are issued at the same time reduce your title policy costs. An Owner’s Policy may also be issued on a property where no lender is involved as protection for the new owner of the property against possible claims. Also, a current owner may upgrade the amount of a title policy on a property should it increase significantly in value due to improvements.

What is a Lender’s Policy?

Your lender knows that title problems can occur more often than you think. The lenders require title insurance to protect their interests in the property. You are not insured by the Lender’s Policy.

What are typical charges for title work?

Actual costs vary from state to state however, you can expect any of the following: a one time premium fee for a Lender’s Policy for Life of Loan, one-time premium fee for an Owner or Fee Policy for as long as you own the property, title search, lender required endorsements and closing service protection letter, closing settlement agent fee, as well as non-title closing fees such as county recording fees to record the new deed or mortgage, overnight/express mailing, lender required appraisal and/or survey, legal representation/attorney fees.

What are the problems that could affect my title?

The following are some of the types of title defects that would negatively affect your property: forged deeds and mortgages, false impersonation of the true owner of the land, instruments executed under fabricated or expired power of attorney, deed apparently valid but actually delivered after the death of the Grantor or Grantee or without the consent of the Grantor, deeds by persons of unsound mind, deeds by minors, deeds not properly delivered, deeds which appears to convey title but are really mortgages, outstanding rights not recorded, federal estate and gift tax liens, errors in tax records and many other defects.