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.
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.
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
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.
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.