Frequently Asked Questions

Title is the legal evidence of a person's ownership rights to the property. In real estate this is called the Deed. This evidence is generally recorded in the public records, and can be proven by tracing the history of the property through a title search.

A title search is a detailed examination of all public records concerning real property. The records found might include deeds, court records, property tax records, mortgages, wills, judgements and liens, divorce decrees, and other legal proceedings. The purpose of conducting the search is to verify the seller's actual right to transfer ownership and to discover any claims, defects or other rights to the property.

Even the most thorough title search may not uncover certain risks. Some, due to their nature, are "hidden" and not necessarily documented. These could include such situations as:

• Errors in property boundaries due to inaccurate surveys
• confusion due to similar or identical names
• Claims made by previously undisclosed or missing heirs
• misinterpretations of wills
• Legal documents executed under invalid or expired power or attorney
• Clerical errors in recording legal documents
• Claims not documented in the public or court records
• liens for unpaid estate, inheritance, income or gift taxes
• fraud and forgery

Hidden risks such as these make title insurance a smart investment. After your closing, if a claim is made against your property due to a hidden risks like the above, your title insurance policy will cover the costs of a legal defense. If the claim was then actually upheld by the court, the policy will reimburse you for all or part of your property loss, depending on the value of the policy.

Title insurance insures and protects you against title defects, judgments, liens, and/or other burdens on your property if they suddenly surface after your closing. Two types of Title Insurance are typically purchased simultaneously in most real property transactions. The "Owner's (or Fee) Policy" protects your interest in the amount of the purchase price of the property. This policy will usually contain a clause that increases the value of your coverage with the value of your interest in the property. It can cover the costs of your legal defense should a defect cause litigation. And in the event that you lose your property, this policy helps you recoup that loss. The "Loan (or Mortgage) Policy" protects the lender's interest in the amount of the outstanding balance of the loan, this coverage decreases as the amount of the mortgage declines. This policy is usually required by your lender, because it protects them. It does not protect your personal investment.

Title insurance premiums are directly related to the value of the property (i.e. the purchase price in the case of an Owner's Policy and the loan amount in the case of a Loan Policy). Unlike other forms of insurance, which are generally paid on an annual basis, title insurance is paid only once. It typically costs less than your annual automobile insurance. But, the one-time payment continues to provide complete coverage for as long as you or your heirs own the property.