What Is Title Insurance?

Title insurance is a contract to indemnify against losses arising through defects in the title to real estate. If the title is insurable, the company guarantees against loss due to any defects in title not specifically set forth in the policy. It also pays all expenses in defense of any lawsuit attacking the title as insured.

Why Do a Buyer and a Lender Need Title Insurance?

When you buy a couch, a television set, or a computer, you have no need to know whether the former owner is married, single, or divorced. You are not interested in whether taxes have been paid or if there are lawsuits or judgments against the former owner. But when you buy real estate, all of those things are vital to know--and many other things, too. A buyer and a lender must have a complete investigation made on every point or you may discover that the property you bought and paid for is not actually yours at all!

In every real estate transfer the matter of title examination invariably arises, and that is usually followed by a question as to the need/nature of title insurance. Admittedly, the ordinary consumer/home purchaser often questions whether title insurance is really necessary when an examination of the title has been completed by an accomplished title examiner or real estate attorney, especially if the examination of available title records shows no adverse information which might raise questions as to the marketability of the title.

"But I have a deed and a title search was originally conducted," many people say, "isn't that all I need?" No! A deed is not proof that the seller is actually the owner. Nor does it contain information regarding the rights others might have in the property, unpaid taxes, mortgages, easements, and restrictions. "Can't I find out about their rights from the public records?" Yes, most of them. However, all of the necessary information is not contained in a single book, in a given office, or even in the same county. Add to this possible errors in indexing, improper searching, errors in examination ... in other words, the human element. Besides, what is not in the public records is often what causes title trouble!

An Owner's Policy and Lender's Policy?

A lender will most likely require a title policy for its own protection. This policy protects only the lender and is referred to as the Lender's title insurance policy.

However, to protect themselves against the many possibilities of loss due to title defects, a buyer should insist upon an Owner's title insurance policy. There are two types of Owner's title insurance policies available to choose from, although the vast majority of people choose the ALTA Homeowner's policy.

What Does Title Insurance Cost?

Use our handy Title Insurance Premium Calculator to estimate your costs.

The cost of an Owner's policy of title insurance is small when related to the value of the property. The higher the valuation of your home, the more title insurance you need. To determine the actual cost of an Owner's Title insurance policy on your home, just give us a call or send us an email . The premium is small and is paid only once for protection that lasts as long as you own the property.