Title Insurance
What is a title to real property?
Simply stated, the title to a piece of property is the evidence that the owner is in lawful possession of that property.
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.
What protections does owners title insurance afford me as a buyer?
Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy. 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, in addition to paying all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the amount of your policy.
Are there different types of policies of title insurance?
Yes. There are two types of title insurance. One type of policy covers the lender and their lien interest in the property up to the balance of the mortgage. The lender requires that the buyer purchase a Title Insurance Policy on behalf of the lender. The loan policy protects the lender against loss due to unknown title defects. This policy protects only the lender’s interest; it does not protect the buyer. The other policy type covers the owner. The owner’s policy protects against loss due to any of the problems mentioned above. Even a hidden defect can result in a claim against your ownership. There are two levels of coverage for the Owners policy. The Enhanced Owner’s coverage includes coverage for zoning, subdivision, building permit and encroachment issues, as well as the coverage for certain post-policy matters such as theft of identity, forgery, and neighbor encroachment. Owner’s coverage provides legal defense and any liability or loss that may arise. The Enhanced coverage also allows for an increase in coverage as the property value increases, up to 150% of the policy coverage.
How does Title insurance differ from other types of insurance coverage?
Insurance such as car, life, health, etc., protects against potential future events and is paid for with monthly or annual premiums. A title insurance policy insures against events that occurred in the past of the real estate property and the people who owned it, for a one-time premium paid at the close of the escrow.
How much does title insurance cost?
Costs for title insurance vary from state to state. Generally, costs are regulated by the state insurance commission. since it is a one time charge at closing for coverage as long as you own the property and not an annual charge, the relative cost is significantly less than you think for the protection it affords a property owner for the length of coverage.
What are the differences between Standard and Limited Owners coverage?
In most cases, we are able to offer two types of title insurance – Standard and Limited, each of which are priced according to filed rates with the state in which your property is located. Standard title insurance covers everything that the Limited policy covers plus a large number of other potential problems, including errors that could occur after you purchase real estate. Standard coverage provides more financial protection in the event that you need to file a claim by insuring the property for its value as of the time the claim is made up to 150% of its original purchase price.
Protecting your money
I received a second set of wiring instructions for sending money to the settlement agent. What should I do?
Title companies will send you their wiring instructions to coordinate your delivery of funds needed for settlement. Phishing fraud and wire fraud are on the rise. If you receive a second set of instructions from anyone, immediately contact the settlement agent to confirm their wire instructions have not changed. Verify the validity of the information sent by calling the originator of the email by using previously known contact information prior to wiring funds for settlement
How do I make sure my money for settlement was sent to the right account of the settlement agent?
Prior to wiring your funds, contact the settlement agent to confirm the account information to ensure you are wiring to the correct company and account. Once you confirm with your bank that the funds for settlement have been wired by your bank to the settlement agent, contact the settlement agent to confirm the funds have been received.