Title Insurance, Questions and Answers
What is Title Insurance?
First, the word Title is a collective term for all your legal rights to own, use and dispose of land. Title includes all previous ownership, uses, and transfers. Before the transfer of real estate property, it is strongly suggested that a title search be performed, and in most cases, the title must be found free and clear of any circumstances that could affect your ability and right to maintain ownership.
Title Insurance protects against the possibility of future loss should your legal rights to your property be challenged.
There are two types of title insurance: an owner’s policy and a lenders policy. The lenders policy protects the lenders interest in the property up to the amount of the mortgage filed against the property. While a lenders policy is generally required in order for a bank or other lender to grant a mortgage loan, an owner’s policy is actually optional, but highly recommended.
What is a Title Search?
A title search was described in a previous “Title Tip” which can be found on our web site under the heading of “Title Tip Newsletter”. That article is dated August 31, 2007. Briefly, a title search is a detailed examination of the public records on a particular property to verify the sellers right to transfer the property.
How long does Title Insurance last?
A lenders policy lasts until the Mortgage/Deed of Trust is paid in full, once paid off the coverage ceases. An owner’s policy remains in force as long as you or your heirs have an interest in the property. If challenges arise after the property has been passed to your heirs, the title insurance company would defend the title for them just as it would have for you, up to the amount of the actual loss, which could be the full amount of the policy limit.
In a future “Title Tip” we will cover some of the common items a title insurance policy would cover along with a brief description of the meaning of those coverage’s. Unlike most other forms of insurance the cost of title insurance is a one-time fee, payable at the closing, never a monthly premium payment due.
Any questions can be directed to Benchmark Title at 618-239-3750. Please feel free to call or email:
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