Your Ownership of Real Estate.
Owner’s Title Insurance is purchased alongside Homeowner’s Insurance when buying a home; however, the two serve different purposes. Title Insurance is an insured statement of the condition of your ownership rights to a certain piece of property. An Owner’s Title Policy describes your property in detail, and states what limitations, if any, there are to your ownership.
Title Insurance only requires a one-time premium, payed at closing. This one-time premium ensures a policy for the length that you own the home, including any heirs you may pass the home onto. The purchase price of your home, determined by the value of the land plus the improvements on that land, is what this Title Insurance premium is based on. This varies depending on the state as well as the Title Company and can range anywhere from $500 to $3,500. But, remember, this only a one-time payment!
Title Insurance is retrospective, meaning it covers matters that could affect your title at the time you purchased your home. However, it does not cover anything done to your home afterward. As it is a one-time payment, the policy amount does not diminish as time passes. Too, it does not increase unless special steps are taken to do so.
Protecting You Against Hidden Risks.
A Title Insurance Policy protects against loss from certain claims on real estate. First, the Title Company will search public records to find and remedy any ownership issues. However, not all defects in the title can be found by examination of public records. Regardless, a Title Insurance Policy will protect against both defects, whether they are discovered at the time of closing or later on.
One protection Title Insurance offers is that it insures you against loss in the event that, as of the date of the policy, it is determined you do not own your home in the case of a forgery in a back deed. Another protection is when there is a lien against your property, of which you had knowledge, that is being forced against you in the form of a missed mortgage or unpaid taxes assessed against your home before you bought it. Finally, it’s possible someone could claim that they own a part of your land that you were not told about when you purchased your title policy, by a missed easement, right of way, or encroachment. All of these hidden risks, and more, will be covered in your policy of Title Insurance, under its stated terms.
How Does a Title Insurance Policy Protect Against These Dangers?
If a claim is made against your title, as covered by your policy, the Title Agency protects you by:
1. Defending your title, in court if necessary, and at the expense of the Title Agency, for all covered matters.
2. Bearing the cost of settling the claim if it proves valid, in order to protect your title.
What Title Insurance Means to You.
For one, peace of mind. An Owner’s Title Insurance Policy guarantees that the property that you
are purchasing is free of undisclosed liens, confusion in the rights of ownership, backlogs of
missed mortgage payments, and other clouds on the title. In short, it guarantees that you own the
property the minute you close on the payment, regardless of its history.
And You Only Pay Once.
There are no annual payments needed to keep your Owner’s Title Insurance Policy in force.
Unlike other forms of insurance, the original premium is your only cost as long as you own the
property. Since there is only that one-time payment, it’s possible that you may forget you even
have a Title Insurance Policy, but, thankfully, the protection remains.