Title Insurance Explained

What is title insurance?

Title insurance policy protects real estate owners and lenders against any loss suffered  because of defects in ownership such as prior liens, encumbrances, lost or missing heirs in the chain of title or fraudulent conveyances.

 

How does title insurance differ from other insurance?

 

Insurance such as homeowner’s and life insurance 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, before your ownership and insures you against construction liens, unreported home improvements, identity theft, claims of ownership and more. The premium is a one-time fee, paid at closing. The owner policy covers you and your heirs for as long as you own the property.

What types of title insurance policies are there?

Loan Policy

Basic Owner's Policy

Enhanced Owner's Policy

When real estate is financed, the lender will require title insurance. The loan policy will protect the lender’s mortgage, not you. It covers the lender up to the amount of the loan and insures that their mortgage has a valid first lien position.

The basic policy protects you against issues that occurred prior to your purchase date, and arises after you buy your home. It will insure your ownership. It will defend claims to ownership and cover any loss up to the insured amount.

The Homeowner’s Policy of Title Insurance, more commonly referred to as The Enhanced Policy, provides more coverage than ever before. It provides for an increase in coverage up to 150% of the insured amount. It also covers some issues that may occur in the future, and so much more. For a details comparison of the basic vs enhanced (click here)