Title Insurance Introduction

A commitment to issue this insurance policy is furnished to your attorney prior to closing. it will show who owns the property, what liens or other matters affect the seller's ownership (such as mortgages, unpaid taxes or judgment), along with any easements, building restrictions, set-back lines or other matters of record which concern the property.

A fault on the title is generally referred to as a "cloud" on title. Unlike other property & casualty types of insurance (auto, home, etc) title insurance insures against past events, not upcoming events. title insurance companies assume the risk that title to a parcel of real estate is as it is presented to be in the policy. A title insurance policy indemnifies the buyer or lender against losses suffered if title to the property is not as the policy states it to be. If, for whatever reason, a lien showed up on your title after you closed and that lien gave another person rights to your home, title insurance will take affect pay any damages that may come as a result.

Title Insurance Tips

If you are getting ready to sell, buy or refinance property, these information may be especially beneficial to you.

Clients may shop title insurers for the most inexpensive rates. Often times, a seller's agent/broker will select a title company with which they would like to use, however buyers or sellers aren't required to use this company. Real estate agencies and title agents may have connected business arrangements with each other which must be revealed.

The premium rates charged by a title company are required to be filed with the Division of Insurance for most states. Likewise, the closing and settlement fees charged by a title company, or title agency, are required to be filed with the Division of Insurance. These rates and fees are on hand for public inspection.

When a title company is used to prepare closing documents, these documents must be prepared in accordance with the closing instructions provided by the lender, broker or both. Your attorney will examine this title commitment and require that the seller clarify any items which aren't allowed by your contract and which would adversely affect your ownership rights.

Mortgage Lenders mainly require a lender's title insurance policy when providing a loan. The lender's instructions and requirements must be met prior to them granting a loan. The lender normally determines the extent of coverage that is provided in this title insurance policy.

A Title company is required to conduct a thorough title search to be sure a clear title. If a "cloud" on the title is exposed, the company will usually specify corrective actions that must be completed prior to, or at the time of, the closing. It is highly suggested that all parties involved carefully read the exceptions page of their title commitment and policy.