UNDERSTANDING

WHY DO I NEED
TITLE INSURANCE?

Purchasing title insurance is a necessary part of any real estate transaction. Chances are high that you are not the first person to own the property you are purchasing. Title insurance protects your lender in the case that any valid claims to the property are discovered after closing.

THE PROPERTY'S HISTORY

When you agree to purchase a particular home or piece of property, your title company will thoroughly research its history through the property records office. It will look for any liens placed on the property, previous claims to the property, and for any easements that might exist.

TITLE INSURANCE - WHAT IS IT?

Title insurance protects you and your lender if for some reason there was a problem during the history of your property with disputes over ownership.

Legally, you are required to purchase title insurance to protect against any claims on the property after the purchase has concluded.

HOW DOES IT PROTECT ME?

Your property may have been bought and sold a number of times during its existence. The title company will do a thorough title search to make sure no one else has legal claims to the property, but they could potentially miss something.

Without title insurance, it's possible that someone could claim title to your property after closing. It's also possible that someone holds an easement on your land to access it. Someone else may say they have a lien filed against your property because of a previous debt owed to them.

IS THERE ONLY ONE TYPE OF POLICY?

There are two types of title insurance:

• An owner's policy is for you, the homeowner, and it insures you for as long as you own that particular property.
• A lender's policy insures the lender's interest in the home against claims that others might have on that particular property.

WHAT WILL IT DO FOR ME?

• Pays legal fees for defending against any claims on the property.
• Provides for indemnification against losses. (Would bear the cost of settling the claim if necessary.)

WHEN DO I PAY FOR TITLE INSURANCE?

You make a one-time payment when you close on your property. Generally the seller pays for the owner's policy and the buyer pays for the lenders policy.

CAN THE TITLE COMPANY
EVER CANCEL THE INSURANCE?

No. Not as long as you still own the property.

SHOULD I SELECT A PARTICULAR TITLE COMPANY?

As with many other things you purchase, it's best to select a company with a solid history and good reputation. Your Realtor and/or mortgage professional will be able to refer a company to you.

HOW LIKELY IS IT
THAT I WILL HAVE TO EXERCISE
THE PROVISIONS IN MY POLICY?

The insurance is granted on the basis that the insurer is convinced a completely thorough title search has been performed, so it's very unlikely you'll ever have to use it.

Keep in mind that someone could however, try to exercise a false claim of ownership against your property and the policy will cover your legal defense fees.

Note that even if you're buying the property from someone you know, there may still be a claim out there none of the parties are aware of. If fraud or forgery was committed during one of the previous sales of the property, you could face some legal difficulties and with out the protection.