TITLE INSURANCE

WHAT IS TITLE INSURANCE

Title insurance is a contract of insurance by a title insurance company to indemnify the insured against loss suffered because of recorded defects in title, unmarketability, liens, easements, and encumbrances not shown in the policy. The policy is issued after thorough research of the public records by highly trained professionals. since the policy is a contract, insureds are protected pursuant to the policy without the necessity of showing negligence on the part of the insurance company.

WHY IS TITLE INSURANCE NEEDED

It reflects the condition of the record title and protects against loss by reason of forgers, missing heirs, errors in public records, deeds executed by those under legal disability, deeds executed and recorded but not validly delivered, and numerous other matters which may affect ownership.

CAN TITLE INSURANCE BE OBTAINED BEFORE A DEAL IS CLOSED

A person or entity can find this out by making application to a title insurance company or title insurance agent in the county where the property is located. A preliminary title report will be issued in preparation of issuing a policy. Such preliminary reports are issued only upon receipt of an order for title insurance for a specified amount of liability.

DOES TITLE INSURANCE COVER FOR EVERY KIND OF LOSS

No. It is based upon an examination of matters disclosed by public records such as deed and mortgage records of the county, city, and county tax and assessment records. Because the title company does not normally inspect the land itself and usually does not cause it to be surveyed, standard title insurance does not cover matters that would be determined by an inspection or survey of the property. There are other exclusions and exceptions from coverage which generally involve government rights to change laws, information not on the public records, and rights (such as water rights).

ARE THERE DIFFERENT KINDS OF TITLE INSURANCE COVERAGE

Yes. Title insurance in several forms is issued to real estate owners, purchasers under contracts of sale, and mortgage lenders. There are other special forms of coverage. A title professional can provide you with a sample policy and can explain various types of coverage.

WHAT PROTECTION DOES TITLE INSURANCE GIVE

Unless an exception is expressly set out in the policy, it insures not only the record title, which can be determined with difficulty, but also against such things as forgery of signatures, false impersonation, incompetency of former owners by reason of their being minors or mentally ill, and the interests of missing heirs whose names do not appear in the probate of estates. These are matters which can totally defeat ownership but which are "invisible" risks.

A POLICY OF TITLE INSURANCE WAS ISSUED INSURING MY TITLE WHEN I BOUGHT MY LAND. WHY SHOULD I HAVE IT RE-ISSUED IN MY BUYER'S NAME WHEN I AM SELLING

Only the insured named in the policy is protected if a claims is made. The purchaser wants, and is entitled to have, full information as to the condition of the title right up to the date of sale. Hundreds and possibly thousands of legal instruments have been recorded since you bought the land. How many of them affect your land? That is what the preliminary title report will show to the purchaser.

WHEN IS THE POLICY OF TITLE INSURANCE ISSUED

The title insurance policy is issued after the deed to the buyer has been delivered and recorded.

WHEN IS THE POLICY OF TITLE INSURANCE ISSUED IF I AM BUYING UNDER A CONTRACT OF SALE

Your policy of title insurance is usually issued after the contract of sale has been signed and recorded.

IF MY LENDER HAS A TITLE INSURANCE POLICY, DOES IT PROTECT THE LAND OWNER

No. The owner cannot make a claim for loss against the title company based on the lender's policy.

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