Title Search - Title Policy - Title Insurance - US Mortgage

 

Module 2 – Title Insurance Policy

Title Insurance Policy:

Policy of Title Insurance is an agreement between the insuring company and the insured that if the condition of the Title to the property is other than mentioned in the policy to the extent of loss or damage occurs, the insuring company will compensate or pay for that loss or damage.

It is a contract by which the Insurance Company protects the purchaser and lender against Losses.

Owner Policy:

            The policy issued to protect purchaser of the property for the full amount he has paid for the property.

Lender Policy:

            The policy issued to protect lending institution for a given loan amount.

Insurance Premium:

            The Title Insurance premium varies, depending on the value of the property and the premium is paid at the time of issue of the policy.

The coverage continues as long as the owner has an interest in the insured property. If the owner dies, the coverage automatically continues for the benefit of the owner's heirs.

The coverage terminates once the property is sold to someone else and the new owner will need to go in for a new Title Insurance policy.

What does Title Insurance Cover?

v  Unknown Title Defects (title issues that prevent from having clear ownership of the property)

v  Existing Lien against the Property Title (Example: The previous owner has unpaid debts from utilities, mortgage, property tax or condominium charges secured again the property)

v  Encroachment issues (Example: A Structure on your property needs to be removed because it is on your neighbor's property)

v  Title Fraud

v  Error in Survey and Public Records and Other Title related issues that can affect your ability to sell, mortgage or lease your property in the future.

What does Title Insurance not Cover?

v  Known Title Defects (that were revealed to you before you purchased your property)

v  Environmental Hazards (ex: Soil Contamination)

v  Native Land Claims

v  Problems that would only be discovered by a new survey or inspection of your property (ex: the property is smaller than originally thought)

v  Matters that are not listed in public records ex: unrecorded liens and encroachment & zoning by law violation from charges renovation or additions to your property or land that you all are responsible for creating.

v  Any losses or damages due to no-title related issues.