Seven Things You Should Know About Title Insurance
What is Title Insurance?
It provides assurance that your title insurer will stand behind you or your Lender financially and with legal defense if needed if a covered title problem arises after you buy your home.
Two Types: Owner's Policy & Loan Policy
An Owner's Policy protects YOU, the homeowner. A Loan Policy protects your Lender ONLY.
Also, an Owner's Policy protects you for the life of your ownership of the home. A Loan Policy expires when the loan is paid off. This is because the lender no longer has a financial interest in the title to the property.
What Types of Issues Could Be Covered by Title Insurance?
Errors in Deeds, such as Legal Descriptions and Vesting Information
Mistakes in Examining Records (such as missing open mortgages, judgments, and other liens, as well as servitudes and other matters that affect title and your use of the property)
Land Use Restrictions
Unmarketable Title due to Subdivision, Environmental or Zoning Violations
Forced Removal of Existing Structures
Lack of Access
Labor & Mechanic's/Materialman Liens
Tax Sale Risks
Coverage Depends on the Policy You Buy.
There are two types of Owner's Policies: "Standard" and "Enhanced". Here is a handy chart which shows you the differences in coverage. Enhanced policies are available for residential properties with improvements only.
Most Lenders Require "Endorsements" To Their Loan Policies.
Lenders often require two endorsements: ALTA 8.1 (Environmental Protection) and ALTA 9.0 (Restrictions, Encroachments, & Minerals). It is safe to say that these will be included on your settlement statement.
Can I get Endorsements On My Owner's Policy?
YES. If you are concerned about a specific risk, you can make sure your policy will protect against it. There are tons of available endorsements for very little money. Call us anytime if you have questions about this.
How Much Will This Cost Me?
Title Insurance is not like other insurance policies. The premium is a one time fee, so after your closing, you will never have to pay a dime more for the protection of the title to your home. Also, ask us about discounts like "simultaneous issue rates", "substitution rates", and "reissue rates".