Our company welcomes you with a title insurance policy to protect the interests of both property owners and buyers on vacation, residential and commercial resale, new construction and refinance transactions.
Title insurance for property owners, called an Owner’s Policy, is usually issued in the amount of the purchase. It is purchased for a one-time fee at closing and is valid for as long as the owner or his heirs have an interest in the property. Only an Owner’s Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search. Possible hidden title problems can include:
- Errors or omissions in deeds
- Mistakes in examining records
- Undisclosed heirs
Title insurance for mortgage lenders title insurance is called a Loan Policy. Most lenders require a Loan Policy when they issue a mortgage loan. The Loan Policy is usually based on the dollar amount of the loan and it protects the lender’s interests in the property should a problem with the title arise. It does not protect the buyer. The policy amount decreases each year and eventually disappears as the loan is paid off.
Title: In simple words, the title to a piece of property is the evidence that the owner is in lawful possession and ownership of that property.
Coverage: Our title insurance protects clients against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy.
Escrow: Escrow is always referring to the process in which the funds of a transaction (such as the sale of a house) are held by a third party, often the title company or an attorney in the case of real estate, pending the fulfillment of the transaction.
Title insurance: Title insurance gives protection to owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property. Each title insurance policy is subject to specific terms, conditions and exclusions.
Needs: Purchasers and sellers as well as lenders need title insurance in order to be insured against various possible title defects. The buyer, seller and lender all benefit from issuance of title insurance.
Types of title insurance: The Owner’s Policy insures the new owner/home buyer and seller and a lender’s policy insures the priority of the lender’s security interest.
Difference between title insurance and other insurance: Insurance such as home, car, life, health, etc., protects against potential future events and is paid for with monthly or annual premiums. A title insurance policy insures against events that occurred in the past of the property and the people who owned it, for a one-time premium paid after the close of the escrow.
Creation of Policy: After the title/escrow officer or lender opens the title order, the title agent or attorney begins a title search. A Preliminary Report is issued to the customer for review and approval. All of the closing documents are recorded upon escrow’s instruction. When recording has been confirmed, demands are paid, funds are disbursed, and the actual title insurance policy is created.
TYPES OF POLICY COVERAGE:
Investment protection: Title insurance offers financial protection against any title problems that might not be found in the public records, are inadvertently missed in the title search process or that may arise from fraud or forgery.
The title policy required by a lender covers only the lender’s interest in a property.
The homeowner’s policy, purchased at closing, provides coverage for the homeowner. If your home’s title is challenged, based on a situation covered in the policy, the title insurer will either perfect (establish a valid title) or pay for defending against the challenge and will either make perfect the title or cover the costs in the case of a valid claim.
Comprehensive Coverage: The following are the two types of Owner’s title insurance policies certified by the American Land Title Association® (ALTA®) – the Owner’s policy and the Homeowner’s policy.
The Owner’s policy protects you from defects and liens in the history of your title through the date and time your deed is recorded in the public records.
The Homeowner’s policy takes your protection to a higher level by providing coverage for many additional risks, including some that might occur after the deed has been recorded.
The Homeowner’s policy protects against many common, frustrating problems, and the policy protects your investment for as long as you or your heirs own the property. Read on for a description of some of the additional coverages you’ll receive when you upgrade to a Homeowner’s policy.
“THE MORE COVERAGE, THE MORE PEACE OF MIND”
Building Permit Violation Coverage: Covers up to $26,000 after a deductible equal to the lesser of 2% of the policy amount or $6,000. This coverage applies if the policyholder has to remove an existing structure (excluding boundary walls and fences) built by a previous owner who did not obtain the required permits.
Subdivision Coverage:Covers up to $11,000 after a deductible equal to the lesser of 1% of the policy amount or $2,600. This coverage applies if the policyholder cannot close a sale, secure a loan or obtain a building permit because the land was improperly subdivided prior to purchase.
Address Coverage: Address coverage insures that the home has the same address as the property insured in the policy.
Restrictive Covenant Violations Coverage: This type of coverage protects against loss of title if someone attempts to enforce an existing restrictive covenant due to a violation that occurred before the policy date.
Zoning Coverage: Zoning coverage protects if the policyholder is forced to remove or remedy an improvement because it violates zoning laws. Protection for forced remedy of violations is subject to a deductible and a maximum dollar amount.
Post-policy Coverage: Post-policy coverage protects against possible post-policy ownership claims.
Enhanced Access Coverage: Enhanced access coverage protects actual pedestrian and vehicular access to the property.
Encroachment Coverage: This protects against someone building a structure (excluding boundary walls and fences) that encroaches on the insured property.
Supplemental Taxes: This coverage protects against supplemental taxes for prior construction, change of use or ownership.
Coverage for Structure Damage from Extraction of Minerals, Water and Other Substances: This coverage protects all existing structures and landscaping on property, including future improvements; and protects against damage caused by others using the land for extraction and development of minerals, water and other substances.
Automatic Coverage Increases: Each of the first five years, the policy amount will automatically increase by 11% in value, up to a total of 160%.
Trust Coverage: Trust coverage extends the policy protection to include a trust that you create.
Trust the Homeowner’s policy backed by the company with well over a century of service and satisfaction – – and you’ll have the peace of mind you need from your title insurance policy.
For more information, contact us to find out how the ALTA Homeowner’s policy can benefit you.