FAQs
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What is Title Insurance
Title insurance is a policy guaranteeing ownership of real estate. The need for title insurance arises from the fact that real estate transactions are complex and technical. Any legal error, no matter how detailed or minute, may cause a defect in the title that impairs its marketability.
In contrast to most insurance policies, which cover losses incurred during the policy term, title insurance covers only losses caused by title defects that have already occurred but are not known when the policy is issued. Examples of such defects are forgeries, invalid or undiscovered wills, defective probate proceedings, or transfers of property by persons lacking full legal capacity to contract.
The title insurance company searches the courthouse records to determine the property location, names of present and previous owners and any pertinent information concerning the particular piece of real estate. This includes searching deeds, mortgage records, tax rolls, lawsuits, judgments, and other miscellaneous records.
After research is completed, a commitment for title insurance is prepared. This simply describes the interest to be insured, the current owner, the real estate, the amount of coverage (usually the purchase price in an owner's policy or the mortgage debt in a mortgagee's policy), and any requirements, exceptions or defects.
The title insurance commitment assures that every possible defect on the title to the land, which can be discovered from the public records, has been called to your attention so that such defects can be corrected.
The closing department oversees that all requirements are met, all defects are addressed, and that all necessary paperwork is executed to perfect the proposed insured's interest. After recordation of all necessary documents, a final policy is issued.
In the event that a defect in the title which was not set forth in the final policy is discovered, the title company will be called upon to pay the loss or defend the title much the same as other casualty insurers.
