Frequently Asked Questions
Find the answer to common questions about title insurance.
- Do I need Owners Title Insurance?
- Doesn’t your deed now take care of giving you clear title?
- How are lawsuits or claims recorded against the property itself?
- How are suits or judgments filed against the owner of the property?
- My lender has a mortgage title insurance policy on my property. Isn’t that enough?
- What do I need to bring to closing?
- What risks call for title insurance protection?
- What type of funds can I bring to closing?
Do I need Owners Title Insurance?
A home is the largest purchase most of us make in our lifetime. An Owner’s Policy will protect you if the title examiner misses a previously recorded lien on your property during the records search and later the lienholder tries enforce it against you. A low, one-time premium is all you pay to obtain the protection and peace of mind of a First American title insurance policy.
The Owner’s Policy protects you against hidden defects in your title to your property including the following:
Claims against the property or the seller that become the new owner’s responsibility after the sale. (Examples are unpaid mortgages, taxes, sewer and water assessments, bills owed to workers or other creditors, etc.)
Claims to Ownership
For instance, this would include a claim of a marital interest by the spouse of a former owner or by a child of a former owner who was not mentioned in his or her parents will.
For example, this would include a transfer by a previous seller who did not actually own the property, or by a previous owner who was not mentally competent.
Lack of Access
For example, this would include if you would have to cross a private road to get to your property and the owner of the road won’t allow you to do so.
Claims are rare but if one is made against you, notify the title insurance company at once, in writing, including copies of all related letters and documents.
The title company will then do the following:
• Negotiate with the other party to settle the claim
• Defend your title in court, if necessary
• Satisfy any covered claim for which it is responsible
• Pay legal costs incurred in defending the title
Doesn’t your deed now take care of giving you clear title?
No. A deed is merely an instrument whereby a seller transfers his or her right of ownership (whatever that might be) to you. It is not proof that the person described as the seller is actually the owner. It does not do away with claims or rights others may have in the property. From the deed, you cannot determine what rights, liens, or claims may be outstanding against your title.
How are lawsuits or claims recorded against the property itself?
If the former owner had a new sink installed and refused to pay the bill, the plumber may file a Mechanic’s Lien. This stands as a claim on the property which you, as the new owner, may have to pay in order to clear your title. Similarly, there may be suits pending affecting the property, foreclosures or bankruptcy actions, or any number of claims or legal involvements which may cloud the title until they are properly settled or removed.
How are suits or judgments filed against the owner of the property?
If a person is sued and a judgment is rendered against that person, any real estate he or she owns may become security for the debt. This means that he or she cannot sell that real estate and deliver a clear title until the judgment is paid, released, or otherwise satisfactorily disposed of. Further, other suits filed against the owner of real estate, even though not yet decided, may prevent the sale of the property.
My lender has a mortgage title insurance policy on my property. Isn’t that enough?
Any person or financial institution that lends money on real estate wants that investment protected. Lender’s title insurance assures the lender that the mortgage is a valid lien protected against hidden as well as known defects in the title as insured. Such a policy affords the only way a lender can be certain about the title which may be acquired in the event of a foreclosure. A lender’s title insurance policy protects only the lender’s interest in the property, not the owner.
What do I need to bring to closing?
If you are married you will need to bring your spouse even if they are not in title or on the loan. In most circumstances you will need to bring two forms of identification. One piece of identification should be government issued identification with a photo such as drivers license, passport or a state issued id card.
What risks call for title insurance protection?
Real estate has such a great value and is so basic a form of wealth that many special laws have been enacted for its protection. As a result, the owner of land has exceedingly strong rights, as well as the family and heirs of the owner. However, other individuals may also have “rights” in the property. There are mortgage and lease-holder rights, liens due to unpaid taxes, lien claims to those whom the owner owes money, mining or oil rights, and many other interests. Anyone who has such a claim cannot ordinarily be deprived of their interest except by having the claim settled or released. As a owner you may know nothing about these risks, but you are still vulnerable to such claims on your property.
What type of funds can I bring to closing?
If the total amount due from you on the Settlement Statement is less than $1,000.00 a personal check is acceptable. Otherwise a certified or cashier’s check is required. If you prefer to wire the funds prior to closing that is also acceptable. We will be happy to provide our wiring instructions upon request.
What is Owner’s Title Insurance?
Grab this PDF download that explains everything you need to know about Owner’s Title Insurance.