What is Title Insurance?

Simply stated, title insurance insures the history of the property. Title Insurance is protection for both property owners and lenders. This type of insurance is necessary to protect against any loss that would be caused by hidden errors or “defects” created by events that happened in the past. These issues may have occurred because of errors or negligence as ownership of the property was transferred (generally many times) over the years. Title Insurance is uniquely different from other types of insurance, in that it protects you in the future for past events.

What does title insurance cover?

Owners and lenders should both obtain title insurance to be protected from those “defects” or “hidden problems”. For this there are 2 types of coverage that can be purchased. First, there is the “Standard” Policy(s). Types of the coverage that this policy provides (but are not limited to) the following:  

• a) Forgery and impersonation
• b) Recorded mortgages, liens or easements that were not property disclosed
• c) Others claiming ownership in the property
• d) Owner, heir, spouse or other party not joining in the signing of documents
• e) Incorrect or incomplete legal descriptions
• f) Lack of access (to and from the property)
• g) Mistakes in Legal Documents; and/or documents not properly recorded
• h) Other matters that directly affect the insured premises.

Second, there is the “Enhanced” or “Expanded” Policy(s). The policy is more extensive, while it provides all the coverages mentioned above, it also includes (but are not limited to) the following:

• a) Coverage for future events
• b) Increase in the coverage for the first 5 years of ownership
• c) Continuous Coverage (even if you no longer own the property)
• d) Pre-existing Restrictive Covenant Violations, Subdivision Law Violations and Zoning Law Violations (these are subject to the policy deductible and maximum liability limit)
• e) Forced Removal of improvements for lack of Building Permit
• f) Encroachment Protections
• g) Water and Mineral Rights Damage (that occurs by someone exercising that right)
• h) Location and dimensions of land (survey not required); 
• i) There is a 20% increase in the premium amount for the additional coverage.
  

PLEASE NOTE: This information is meant to be a helpful resource. Please make sure refer to your insurance policy jacket for the specifics terms, conditions and exclusions of your policy coverage(s). Should you have any questions please contact your insurance provider for more details. Thank you.

How much does title insurance cost?

Title insurance is a one-time fee that is included in the closing costs. It should be clearly set out on the closing statement.   The premium is calculated based on the sales price and/or loan amount.    Title insurance rates (or fees) are calculated based on the rates set out by each state’s governing insurance body.  Any questions regarding the premium should be directed to your settlement agent or title company issuing the policy.