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What Is Title Insurance?

Mortgage Title InsuranceCape Cod Title Insurance

A Title Insurance provides valuable protection for homeowners, real estate owners, and even lenders from any property loss or damages.

Owners who have title insurance are protected from any unknown issues that may arise later such as documents executed under false, revoked or expired powers of attorney.

Some cases, someone can even do false impersonation of the true owner of the property and forge deeds, and even release wills.

Types of Title Insurance

Owner’s Policy

There are various kinds of title insurance for many different individuals. Property owners usually would go with a policy called “Owner’s Policy” and is typically issued in the same amount as the purchase of the real estate. For homeowners, this may be included in the closing fee and should be valid for as long as the owner occupies the property. The Owner’s Policy also protects the owner of any title issues such as:

  • Errors or omissions in deeds
  • Mistakes in examining records
  • Forgery
  • Undisclosed heirs

Loan Policy

Mortgage lenders is offered title insurance as well called “Loan Policy”. It is usually required by lenders when they make the decision of issuing out a mortgage loan to a borrower. This policy in most cases is based on the total amount of the loan, protect the lender in case of title problems. This policy does not protect the buyer. The amount of the policy usually decreases annually and would then disappear when the loan has been paid off.

There are different ways to pay for title insurance, which is why there are various types. It is usually paid for with a one-time premium and protects and covers as long as the policyholder or the heir still owns the property.

What Does the Title Insurance Protect You From?

Title Insurance can protect you from many things that can possibly occur, below are a few common hidden risks that may cause you to lose your title or create an encumbrance on your title:

  • False impersonation of the true owner of the property.
  • Forged deeds, release wills
  • There may be a mistake in the recording legal documents.
  • Fraud
  • Undiclosed or missing heirs
  • False affidavits of death or heirship.
  • Adverse Possessiom
  • Rights of divorced parties

The list can go on forever, but the whole point of it is…..title insurance is highly important for many and does in fact help pay for defending against or even pay for the losses to the insured.

Frequently Asked Questions

  • Q

    What does an owner's policy provide?

    -Protection from financial loss due to claims against the title to your home, up to the face amount of the title policy.
    -Payment of legal costs if the title insurer has to defend your title against a covered claim.
    -Payment of successful claims against the title to your home covered by the policy, up to the face amount of the policy.

  • Q

    If the status of title is cleared before you buy, why do you still need title insurance?

    You can never be too careful, even after a research, you can never be thorough enough. Always expect the unexpected, there are risks for fraud, forgery, and even mistakes made due to similar names, all of these flaws can go undetected sometimes. Title insurance protects you against future claims, the coverage of title insurance varies for many due to terms and conditions.

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