Frequently Asked Questions about Title Insurance

What is a title?

What is title insurance?
Title insurance is your policy of protection against loss if any of these problems-even a hidden hazard-results in a claim against your ownership.

What is a title search?
A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes and many other documents. The purpose of the search is to verify the seller's right to transfer of ownership and to discover any claims, defects and other rights or burdens on the property.

Are there problems that a title search cannot reveal?
Yes. There are some hidden hazards that even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his/her marital status, resulting in a possible claim by his legal spouse. Other hidden hazards include fraud, forgery, defective deeds, mental incompetence, confusion due to similar or identical names and clerical errors in the records. These defects can arise after you've purchased your home and jeopardize your right to ownership.

How much could I lose if a claim is filed against my property?
That depends on the claim. In an extreme case, you could lose your entire home and property and still be liable to pay off the balance of your mortgage. Most claims aren't that dramatic, but even the smallest claim can cost you money, time and aggravation and you'll still have to pay costs for a legal defense.

The owner of the property has a deed. Isn't that proof of ownership? 
Not necessarily. A deed is just a document by which the right of ownership in land is transferred, whatever that right may be. It is not proof of ownership, and it doesn't do away with rights others may have in the property. In addition, a deed won't show you liens or claims that may be outstanding against the title.

What about an attorney's opinion?
An attorney's opinion is based on a search of the public records. So, once again, even the most exhaustive search os these records may not reveal everything. It's also important to remember that an attorney is not liable if you should suffer loss because of hidden hazards in the title.

The previous owner had a search six months ago. Why do I need another one?
Because the owner could, in a very short time, do many things to encumber the title. For example, he could grant easements or construct improvements which encroach on adjacent property. He could get married or divorced or have a lien filed against the property. It is necessary to conduct an up-to-date title search to uncover any such problems.

The builder of my home has title insurance, why do I need it when I purchase the land from him?
A title policy insuring the builder does not protect you. A great many things could have happened to the land since the builder's policy was issued. Liens, judgments and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property, causing you aggravation and costing you money.

Are there different types of title insurance policies?
Yes. Basically there are two different types of policies, a lender's policy and an owner's policy. The lender's policy protects the lender's interest in the property as security for the outstanding balance under the buyer's mortgage. The owner's policy safeguards the buyer's investment or equity in the property up to the face amount of the policy. Title insurers in many states offer increased policy coverage through inflation endorsements to cover increases in value due to inflation.

How much does title insurance cost?
Probably less than you think. Charges vary in different sections of the country, but generally the cost of title insurance (including search, examination and related services) amounts to about one percent, or less, of the cost of the property. Unlike other insurance premiums which must be paid annually, a title insurance premium is paid one time only, usually at settlement.

How long does my coverage last?
For as long as you or your heirs retain an interest in the property.

Where can I get title insurance?
From Integrity Land Title. When selecting a title insurer, it is important that you look for a company with expertise and experience, as well as the financial strength to protect you should a claim arise.