What is title insurance?
When a home is purchased you are given title to the property, which usually results in a full legal ownership of the property. Title insurers review the public records to identify any potential issues which might give someone else a legal claim against your property. The largest difference between title insurance and other types of insurance is that title insurance is based on risk prevention rather than risk assumption.
What does it cover?
Title insurance protects against claims from title defects. Issues that are specifically covered are listed in the title insurance policy and can include: improperly recorded documents, forgery, fraud, liens, someone claiming an ownership interest in the property, encroachments, and easements.
Types of title insurance:
Lender’s Title Insurance – If you are taking out a mortgage against a property, virtually all lenders will require the purchase of Lender’s Title Insurance. The Lender’s Policy is based off the dollar amount of the loan and protects the lender against loss should a title problem arise. A Lender’s Policy will only protect the mortgage companies interest in the property should a problem arise.
Owner’s Title Insurance – Owner’s Title Insurance is a one-time fee generally paid at the closing of the purchase transaction. `insurance stays in effect for the duration a purchaser owns the property, or if the purchaser dies, the length of ownership for their heirs. If a covered title claim occurs, the owner’s policy will protect the homeowner and cover attorney fees to defend the title of your property. If a loss occurs due to the claim, the policy will protect from financial loss up to the face amount of the title policy
Do I need Owner’s Title Insurance?
We highly recommend that anyone purchasing a property should invest in Owner’s Title Insurance. The purchase of a property tends to be a large investment and should be protected accordingly. If a claim arises on a property without Owner’s Title Insurance, the owner would then be responsible for paying what is owed or the court fees to defend their title to the property.
While a title search will be done on the property for lender title insurance, the Lender’s Title Policy offers no protection for the borrower as it is an indemnity contract for loss, which means the lender must suffer a loss prior to placing a claim against the property.
What is the cost?
In most states, title insurance rates are set by a state agency. This causes the premium amount to be the same from one insurer to another. Title agents charge additional fees for services rendered through the transaction (Closing or Settlement Fee, Title Search or Examination, Tax Certifications, Etc..). Comparing the premiums and additional fees between companies is one of the easiest ways to save money at your closing.
In many states, if the Owner’s and Lender’s Policies are purchased simultaneously, the Owner’s Policy is provided at a discounted rate.
Orchard Street Settlements believes in providing exemplary service at a reasonable price, please feel free to e-mail [email protected] for a quote or use our online rate calculator.