Title Insurance Frequently Asked Questions
This BLOG On Title Insurance Frequently Asked Questions Was Updated On April 23, 2017
Common title insurance frequently asked questions by homeowners are the following:
- What is title insurance
- Importance of title insurance
- What does title insurance do for borrowers of loans
- Coverage from title insurance policy
- Who benefits from title insurance
Title insurance insures properties and it purpose is that the title to the property is free and clear and recorded. Title policy needs to abide by instructions given by lenders with the only exceptions are the line items express on the policy.
Another common Title Insurance Frequently Asked Questions is does the title company insure blemishes on title that do not appear on public records of title?
- Examples of blemishes not reported on title are items such as forgery interest of missing heirs who have claims to the property, identification of parties, people who have no right to sell the subject property, and mistakes on title made by previous owners
Other Title Insurance Frequently Asked Questions
Other Title Insurance Frequently Asked Questions is are all blemishes on titles covered?
The normal traditional title owners policy insures defects on title on public records of the county’s recorder of deeds office where the property and land is at. The title policy does not cover from issues that need to be revealed and disclosed by a professional inspector and/or surveyor.
Here are subjects that title companies does not normally insure:
- Title company will not insure issues not revealed through public records search such as unrecorded easements
- Unrecorded liens and money due are not covered
- Rights to utilities ways that is not recorded is not covered
- Unrecorded private and/or public roads are not covered
- Any other types of encumbrances are not covered
- Unrecorded rights and claims by people in possession of the subject property who are not recorded on public records are not covered
Can Protection Be Obtained On Matters Not Recorded?
Upon application, the company issuing new title can cover issues that are not revealed nor disclosed by an inspection or survey of the subject property. Title companies will assess a special extra fee for an intense physical inspection of the property to check on flaws or blemishes on title that are not recorded. Title companies call this extended coverage.
Types Of Title Insurance Policies
Here are the different types of title insurance policies:
- Homeowners Title Polices are granted to owners of properties
- Home Purchase title policy is granted to home buyers and have an executed real estate purchase contract
- Home Loan Title Policies is issued and granted to mortgage lenders
When Is the Policy Issued?
An owner’s policy protects only the owner while a Mortgage policy protects only the holder of the mortgage on the property. Separate policies are required to protect both interests. Special rates are available when both Owner’s and Mortgage policies are applied at the same time. The Owners Policy of title insurance usually is issued after the deed to the buyer is ‘delivered’ and recorded. A Purchasers Policy is usually issued after the contract has been executed by both parties or after the signed contract has been recorded. The mortgage policy of title insurance is usually issued after the mortgage or deed of trust has been properly executed and recorded.
If I Was Insured When I Bought the Land, Why Should I Have It Re-Issued to My Purchaser When I Sell?
The coverage of your policy is against all matters that appeared of record up to the date of issuance of your policy. Since that time many documents may have been recorded, some of which may affect the title to your land. Taxes and assessments may have accrued and be unpaid. There may have been actions in court affecting your title. The purchaser is entitled to have full information and protection as to the condition of the title right up to the date of his purchase. In addition, there may be matters of record which would prevent either the seller or buyer from selling, buying, or mortgaging land until such matters have been cleared. These items include such things as federal tax liens, judgments, incompetence, divorce actions and other conditions which the title search may disclose.
How Are Premiums for Title Insurance Determined?
The determining factors on premiums of title insurance is by the extent of coverage and the type of coverage that is provided by the title insurance company. The unique thing about title insurance is that there is no monthly or annual payments with title insurance premiums. Title insurance is only paid once on the effective date of title and will remain in the name of the title of the owner for life.