Understand how title insurance protects you.

Purchasing or refinancing a property requires a lot of time and effort. Our team is readily available to answer any questions you have throughout the process.

Title insurance provides protection from “hidden risk”, due to unforeseen claims that may be asserted to your property. The policy provided protection from financial loss and payment of all legal cost to defend title claims.
Even though a title search may be extensive and exacting, it is limited to public records, so the possibility of “hidden risk” remains. This is where Homeland’s expertise comes in. Records may not reflect claims of missing heirs, false impersonations, forgeries, improperly probated wills or clerical errors in recording legal documents, so without title insurance your investment is at risk. But the risks don’t stop there. Confusion due to similar or identical names, deed executed under expired or false powers of attorney, unsatisfied claims not shown on the records and mistaken interpretation of wills and trusts are just a few more of the hidden risks that make the purchase of title insurance and a thorough title search a most prudent one-time investment.
For the average property owner, there are two different types of title insurance policies that you need to be aware of:  Basic Owner’s Policy and Enhanced Owner’s Policy.

Basic Owner’s Policy

Title company searches all records back 60 years, tracing the ownership of your property. The Basic Policy protects you from hidden issues (Forgeries, Hidden Heirs, Fraud, Mistakes in Recording Legal Documents) and covers you up to the dollar amount of insurance provided by the policy. You pay for owner’s title insurance only one time – when you buy the property. The original premium is your only cost as long as you or your heirs own the property. There are no annual payments to keep your owner’s title insurance policy in force.

Enhanced Owner’s Policy

The Enhanced Owner’s Policy provides a higher level of coverage than the Basic. The Enhanced Policy covers all title defects that the Basic covers, plus additional defects that may occur pre and post closing. The Enhanced Policy also includes built-in inflation protection, where the policy amount will increase by 10% each year for the first five years up to 150% of the original policy amount. See below for additional coverage provided by the Enhanced Owner’s Policy.

Title insurance is different from other types of insurance in that it protects you, the insured, from loss that may occur from matters or defects from the past. Other types of insurance such as auto insurance, life insurance or health insurance, cover you against losses that may occur in the future. Title insurance does not protect against a defect that may originate at a later date.
There are numerous defects or problems that can arise to cause an attack or loss of the title to your property. Some of these include problems not disclosed by the most careful search of the public records (the title search). Hidden risks can cause a total loss of your investment or heavy legal expenses in the defense of a claim.

Some title problems may show up months or years after the original purchase of the property. The following are examples of some of the matters that can cause loss of title or an expensive lawsuit:

  • Forged deeds, releases, wills or other legal documents
  • Failure of spouses to join in conveyances
  • Undisclosed or missing heirs
  • Deeds from minors, aliens or persons of unsound mind
  • Errors in indexing of public records
  • Liens for unpaid taxes including estate, inheritance, income or gift taxes
  • Erroneous reports furnished by tax officials
  • Mistakes in recording legal documents
  • Deeds from defunct corporations
  • Unprobated wills
Title insurance defends you in a lawsuit attacking your title and either corrects the title problem or pays the insured’s losses up to the face amount of the policy. The policy also protects you after you sell the property, for defects occurring prior to your ownership that cause a loss to a purchaser if the title was warranted by you.

The title policy guarantees that at the date the deed was filed for record placing title in the name of the insured, the title was free of defects apart from those “excepted to” in the policy. The policy does not guarantee an actual amount of land. It guarantees that there are no buildings or other improvements belonging to someone else located on the insured land when an acceptable survey is furnished to the title company. An additional premium is paid to amend the standard survey exception.

It’s easy! Simply inform the Title Company, attorney or agent handling the closing of your property that you want to purchase an Owner’s Title Insurance Policy.
No, it’s not a double payment or duplicate coverage. The Lender’s Title Insurance Policy protects the lender’s interest only so long as the loan is outstanding and only in the amount of the balance of the loan at any given time. The Owner’s Policy protects you up to the face amount of the policy during your ownership and after you have sold the property if you have warranted the property to your subsequent buyer.

After arranging a loan, you pay a premium for the purchase of the Lender’s Title Insurance Policy based on the amount of the loan. If you desire to purchase an Owner’s Policy at the same time, you pay an additional premium only for the difference that covers your equity or investment in the property together with a small “simultaneous issue fee.” Because of this, you do not pay twice for the two policies.

If you buy your Owner’s Policy separately, you pay the full premium for the policy. Likewise, if you refinance or borrow additional money at a later time, you can expect to pay additional premiums for the new policies, if required.

If you have any questions concerning title insurance coverage, please contact Homeland Title. This is only an introduction to title insurance. The exact terms and conditions of coverage are provided in your policy.