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Frequently Asked Questions

What is Title Insurance

Title Insurance insures the policy owner against loss or damage caused by title defects in the insured property. A title policy guarantees the policy owner that there are no outstanding liens or encumbrances against the property, and that there is no one else with rights or claims to the property, other than those shown in the policy.

There are two basic types of title insurance policies: an owner’s policy and a loan policy (also known as lender’s policy or mortgage policy). The owner’s policy insures the property owner, the loan policy only insures the lender.

Title insurance differs from other insurance policies, in that it protects the policy owner against a loss from events that happened in the past, as opposed to something that may occur in the future. The premium is only paid once; the cost of an owner’s policy is based upon the value of the property, the cost of a loan policy is based upon the mortgage amount to be insured.

In the event of a claim, the title insurance company provides legal defense for the policy holder and pays any covered losses, up to the policy limit, incurred as a result of the claim.

When a title policy is ordered, the property is searched through the court house records, owner (and buyer) names are checked for liens and judgments, and a title commitment is issued. Schedule A of the commitment will include the legal description of the property to be insured, the names of the property owners, and the policy amounts. Schedule B-I will show the requirements necessary to clear title; if there are existing mortgages or liens or judgments to be paid off, this is where they will appear. Building setback lines, utility easements and other recorded restrictions and covenants affecting the insured property appear on Schedule B-II.

The title policies are issued after the transaction closes, the documents are recorded at the court house, and we are furnished with proof that all Schedule B-I requirements have been met. Unless otherwise requested, the owner’s policy is mailed to the property owner and the loan policy is mailed to the lender.