What is Title Insurance?
1. WHAT IS TITLE INSURANCE?
Title insurance provides coverage for certain losses due to defects in the title that occurred prior to your ownership. The seller can give you only those rights that have been previously received by him/her with good title. Title insurance protects against such prior fraud or forgery that might go undetected until after closing and possibly jeopardize your ownership and investment.
2. WHAT TO LOOK FOR IN A TITLE COMPANY?
You should insist on a title company with a stable financial history and an established background in your area. Your insurance has no benefit if your title company isn't around when you need it.
3. HOW DO I CHOOSE A TITLE COMPANY?
Each attorney typically works with one to two title companies to provide title insurance to the purchaser or borrower. Tracey Reynolds works with Old Republic Title Insurance Company (ORT) which has a stable financial history, and ORT responds readily to our client's needs. A.M. Best Co., an insurance rating company founded in 1899, has affirmed that Old Republic Title Insurance Group and its subsidiaries have a financial strength rating of A+ (Superior) and issuer credit ratings (ICR) of aa-.
4. WHY DO I NEED TITLE INSURANCE?
When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights you bargain for.
5. WHEN ARE THE PREMIUMS DUE?
There is a one-time premium which is paid at the time of closing. The fee is listed on the settlement statement along with other closing fees. Typically the owner pays both for the lender's and owner's policy.
6. WHAT DOES IT COST?
The cost varies, depending mainly on the value of your property. The important thing to remember is that you pay only once for an owner's policy, then the coverage continues in effect for as long as there is no change in ownership. If you should die, the coverage automatically continues for the benefit of your heirs. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.
7. WHAT IF I HAVE A PROBLEM?
Upon notice of a claim adverse to your title, you may contact your title insurer or the agent who issued your policy. Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle an adverse claim
8. IF A LENDER GETS TITLE INSURANCE FOR ITS MORTGAGE, WHY DO I NEED A SEPARATE POLICY FOR MYSELF?
The lender's policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became nonperforming and the claim threatened the lender's ability to foreclose and recover its principal and interest. And, in the event of a claim, there is no provision for payment of legal expenses for an uninsured party.
9. CAN YOU BE MORE SPECIFIC ABOUT THE TYPES OF CLAIMS, OR RISKS, COVERED BY TITLE INSURANCE?
A few examples are: miss-recorded documents, miss-indexed documents, fraud, improper estate proceedings, deeds executed under false or expired powers of attorney, forged deeds or releases, discovery of a latter will after probate of the first will.