Why Title Insurance?

A title insurance policy guarantees that the title to the property is free of “hidden” liens, hazards or human errors. When title insurance is purchased an experienced title examiner performs a comprehensive search of the public land records to determine if any liens or other encumbrances are attached. Although this search is intended to report all material title objections, there is always a chance that the substantial issues may go undetected. For example, an unknown heir of a previous owner who has a valid claim against the property, unrelinquished marital rights of previous owners, or invalid signatures. An Owner’s policy protects your interest in the real property against such unforeseen threats to your ownership.

To protect against risk, a lender will require assurance that the title to the property is clear; and this is done through the issuance of a loan policy. The lender’s policy covers the lender only, while the buyer is unprotected without the issuance of a separate owner’s title insurance policy.

For a one-time premium, paid during the closing process, an owner’s title insurance policy protects against future losses arising out of events that may have happened in the past. Your policy serves as a written guarantee that your underwriter will undertake, at its own expense, the defense of your title in all legal actions or proceedings alleging title to be other than as insured.

What does Title Insurance Cover?

  • Forged deeds, releases or wills
  • Fraud in connection with execution of documents
  • Clerical errors in recording legal documents
  • Wills not properly probated
  • Undisclosed or missing heirs
  • Dower or curtesy rights of ex−spouses of former owners
  • Unsatisfied claims not shown on record
  • Deeds executed under expired or false powers of attorney
  • Liens for unpaid taxes

Standard vs Enhanced Coverage

A Comparison of Owner’s Title Insurance Coverage
Protection from financial loss due to: Standard Coverage Enhanced Coverage
Ownership Title: another party claiming an ownership in your home Yes Yes
Public Record Errors: issues relating to an improperly signed document or a document recorded inaccurately at the county recorder’s office Yes Yes
Fraud & Forgery: another party having rights in your property arising from forgery or false impersonation Yes Yes
Undisclosed Heirs: an unknown heir claims an ownership interest in your home Yes Yes
Liens: a creditor of the previous owners attempting to enforce a lien Yes Yes
Access: discovering you do not have actual physical access to your home No Yes
Subdivision Law: loss from a violation of a subdivision law resulting in the inability to obtain a building permit * No Yes
Building Permit: if you are forced to remove or remedy your existing structures, other than boundary walls and fences, because they were constructed without obtaining a proper building permit * No Yes
Zoning: if you are required to remove or remedy your existing structures, other than boundary walls and fences, due to a violation of a zoning law * No Yes
Encroachment (your structures on neighbor’s property): your neighbor forces you to remove an existing structure(s), which encroaches onto neighbor’s land (boundary walls or fences are subject to a deductible) * No Yes
Encroachment (neighbor’s existing structures encroaching on your property): your property becomes unmarketable because someone refuses to perform a contract to purchase, lease it, or make a mortgage loan due to your neighbor’s structure encroaching on your land No Yes
Encroachment (neighbor creating encroachments after closing): if your neighbor builds any structures after the Policy Date, other than boundary walls and fences, which encroach on your land No Yes
Encroachment (your structures encroaching an easement): if you are forced to remove a structure which encroaches onto an easement or over a building setback line No Yes
Easements: loss arising from damage to an existing structure due to the exercise of a right to maintain or use the easement No Yes
Surface Extraction: loss from damage to existing improvements due the future right to use the surface of the land for the extraction or development of minerals or water No Yes
Covenants, Conditions, Restrictions: if you are forced to remove or correct a violation by a previous owner No Yes
Supplemental Taxes: supplemental or “roll back” taxes for a period before the policy date No Yes
Continuation of Coverage: provides ownership coverage to anyone who inherits the property; a spouse who receives title upon dissolution of marriage; the trustee to whom the insured transfers title and the beneficiaries of the trust Yes Yes
Automatic Increased Coverage: policy liability coverage increases 10% per year for 5 years to a maximum of 150% of the initial policy amount No Yes

* Coverage is limited to deductibles and maximum dollar amounts of liability.