WHAT IS TITLE INSURANCE

Be smart.

 

Title insurance protects the owner of the property or a lender to the property.

BASIC INSURANCE COVERAGE

  1. Someone or some other entity has an ownership interest in your property. Common examples are unknown heirs, or someone not signing on the deed of conveyance.

  2. The Deed of Conveyance has been improperly executed, such as with no notary clause.

  3. The Deed of Conveyance is not properly recorded with the local jurisdiction.

  4. The seller or as seller somewhere in the chain of title has committed fraud or forgery.

  5. An unreleased lien against the property.

  6. Unmarketable title.

ADDITIONAL INSURANCE COVERAGE

  1. Mechanics’ liens

  2. The forced removal of a structure that encroaches onto your neighbor’s land

  3. The forced removal of a structure that encroaches onto an easement or over a building setback line

  4. The forced removal of structure which violates existing zoning law *

  5. The forced removal of a structure because of a violation of a restriction in Schedule B

  6. Inability to use the land for a single-family dwelling because of a violation of a zoning ordinance or restriction in Schedule B

  7. Pays rent for substitute land or facilities

  8. Rights under unrecorded leases

  9. Plain language

  10. Unrecorded easements

  11. Building permit violations *

  12. Compliance with Subdivision Map Act, if any *

  13. Restrictive covenant violations

  14. Map, if any, not consistent with the legal description

  15. Covenant violation resulting in reversion

  16. Enhanced marketability

  17. Violations of building setbacks

  18. Discriminatory covenants

  19. Access: Actual vehicular and pedestrian access based on a legal right

  20. Boundary walls and fence encroachment *

  21. Post-policy forgery

  22. Post-policy encroachment

  23. Post-policy damage from minerals or water extraction

  24. Post-policy Living Trust coverage for trustee

  25. Post-policy Living Trust coverage for a beneficiary

  26. Post-policy automatic increase in value

  27. Post-policy adverse possession

  28. Post-policy cloud on title

  29. Post-policy prescriptive easement

  30. Insurance coverage forever

 

The enhanced version costs 20 percent more than the basic policy. The basic policy cost depends on the contract sales price. If you are purchasing a home with a loan from a lender, the lender’s policy protects the lender. This lender’s policy (often called a loan policy) is required by most lending institutions as a way to ensure their security interest in the property. This policy protects the bank or other lending institution as long as they maintain an interest in the property (typically until your mortgage is paid off).

 

REFINANCE TRANSACTIONS

If you are considering refinancing your mortgage, you may be surprised to see that you are required to purchase a new lender’s policy of title insurance. A lender’s policy only provides coverage for the life of a loan. When a home is refinanced, the life of one loan ends and another begins. Thus, a new lender’s policy for the title is required. An owner’s policy provides coverage as long as you or your heirs hold an interest in the property. There is no need to purchase a new owner’s policy when refinancing.