Title Insurance
Purchasing a home is probably the single biggest investment you will ever make. Before closing on the house, you'll want to know that no other individual or entity has a right, lien or claim to the property.
Determining that your rights and interests to the property are clear is the business of a title insurance company.
For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your "owners" policy as well as the "lenders" policy.
One of the marked advantages of title insurance is that prior to a policy being issued, the title insurance company completes extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property. Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.
Your title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you from loss:
- if someone contests your title in legal action (the title insurance company will defend the title at no expense to you),
- or if there is a title defect that cannot be eliminated (the title insurance company will protect you from financial loss up to the amount of the policy).
Types of Title Insurance
There are three different
types of Title Insurance. A Lender's Policy,
Standard Owner's Policy and the Owner's
Enhanced Policy. Lender's Coverage is required
by all corporate lenders as a condition
of the purchaser's loan. This covers only
the lender for the amount of the loan they
are making to a borrower. The Lender's Policy
provided is the
standard ALTA 1992 Loan Policy unless enhanced coverage is requested. It provides
coverage to the Lender against such title
encumbrances as fraud in connection with
the execution of document, incorrect representation
of the marital status of grantors, wills
not properly probated, and many other circumstances
that might jeopardize the Lender's security
in the property. The Standard ALTA 1992 Owner's Policy protects you as the owner of real property against fraudulently executed documents, incorrect representations and improperly probated wills as well as any unsatisfied claims that may not appear in the County land records.
The Owner's Enhanced Policy covers you, the owner against all that is included in a standard ALTA 1992 policy but with additional and enhanced coverage. For an estimate of costs for title insurance please see our cost calculator. Subject to limitations, some of the benefits of an Enhanced Policy include:
- Mechanic's lien coverage is provided for work done prior to the date of your policy.
- Zoning coverage is now provided, insuring that your land is properly zoned for a single-family residence.
- Subdivision coverage is now provided in the event your land is a portion of an improperly created subdivision.
- Coverage is provided if you as the owner are forced to remove an existing structure, other than a boundary wall or fence, due to a previous owner's failure to obtain the necessary building permit. Coverage is provided if an adjacent builder builds onto the homeowner's property without permission.
- Coverage is provided for forgeries affecting your ownership after the date that your title insurance policy is issued.