WHAT IS TITLE INSURANCE

Be smart.

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

BASIC INSURANCE COVERAGE

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.
The Deed of Conveyance has been improperly executed, such as with no notary clause.
The Deed of Conveyance is not properly recorded with the local jurisdiction.
The seller or as seller somewhere in the chain of title has committed fraud or forgery.
An unreleased lien against the property.
Unmarketable title.

ADDITIONAL INSURANCE COVERAGE

Mechanics’ liens
The forced removal of a structure that encroaches onto your neighbor’s land
The forced removal of a structure that encroaches onto an easement or over a building setback line
The forced removal of structure which violates existing zoning law *
The forced removal of a structure because of a violation of a restriction in Schedule B
Inability to use the land for a single-family dwelling because of a violation of a zoning ordinance or restriction in Schedule B
Pays rent for substitute land or facilities
Rights under unrecorded leases
Plain language
Unrecorded easements
Building permit violations *
Compliance with Subdivision Map Act, if any *
Restrictive covenant violations
Map, if any, not consistent with the legal description
Covenant violation resulting in reversion
Enhanced marketability
Violations of building setbacks
Discriminatory covenants
Access: Actual vehicular and pedestrian access based on a legal right
Boundary walls and fence encroachment *
Post-policy forgery
Post-policy encroachment
Post-policy damage from minerals or water extraction
Post-policy Living Trust coverage for trustee
Post-policy Living Trust coverage for a beneficiary
Post-policy automatic increase in value
Post-policy adverse possession
Post-policy cloud on title
Post-policy prescriptive easement
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.