Home Buying • 2 min read

Title Insurance 101

Fierce & Associates

Whether you’ve been fully immersed in the real estate world or you’re just venturing into purchasing a new home, title insurance is one of those fancy terms you’ve heard mentioned a couple of times. Keep reading to learn everything you need to know about title insurance.

What is Title Insurance?

Title insurance is a policy meant to safeguard home buyers and lenders from damages or losses caused by bad titles. Most title insurance policies include all the common claims filed against a title, such as outstanding liens, back tax claims, and conflicting wills.

Who Needs Title Insurance?

Buyers and lenders need title insurance as they both want to know whether the property they are involved in is insured against specific title problems. Title companies provide this coverage subject to the terms and conditions of the policy. All three parties benefit from the insurance provided through title companies.

What Does it Cover?

Title insurance offers protection for defects in the title to a property, effective on the date the policy is issued. For example, a claim might be made that a person has a deed or lease giving them ownership or the right to possession of your property. Another person could claim that they have an easement giving them the right of access across your property or say that they own your property and are holding it as security for a debt. Title companies work with real estate of all types.

What are the Types of Policies?

Title companies routinely issue 2 types of policies: An owner’s policy which insures you, as the Homebuyer, as long as you and/or your heirs own the home, and a lender’s policy which protects the lender’s priority interest over the claims that other people may have in the property, such as the Homebuyer’s mortgage.

What Protection Do I Get?

A title insurance policy will cover the legal fees in defense against a claim against your property. It also contains provisions to indemnify you against losses that result from claims covered by the policy. A premium is paid when a transaction is closed. There are no continuing insurance premiums, as there are other types of insurance.

Do I Need Title Insurance if I Know the Seller?

There may also be matters affecting the property that are not obvious or known, even by the existing owner. A title search and examination seek to uncover as part of the process leading up to the issuance of the title insurance policy.

Title Insurance Gives You Peace of Mind

Just as you wouldn’t invest based solely on a phone call, you shouldn’t buy a property without assurances to your title. Enjoy a stress-free buying experience by protecting yourself in advance. If you’re ready to start looking for your dream home, get in touch with our team today!