What is title insurance?
Title insurance protects you against covered title defects, like a previous owner's debt, liens and other claims of ownership that may have been instituted prior to your purchase.
How is it different than traditional insurance policies?
Title insurance is a one time charge collected at closing that protects against past problems, whereas property and casualty insurances, deal with future risk.
What types of policies are available and how long are they valid?
Loan Policy: Policy required by a mortgage lender to protect against title defects that could affect the lien status of the lender's mortgage. A loan policy is effective for the life of the loan.
Owner's Policy: A separate policy that protects the owner against title defects that could affect your ownership rights. An owner's policy is valid as long as you or your heirs retain an interest in the property.
TITLE INSURANCE PROCESS
A search of public records helps title professionals find possible title defects (also called clouds) and associated risks. An in-depth title search can uncover many unknown title clouds, including liens, easements, judgments, assessments, taxes and levies, land encroachments and unpaid debts.
SEARCH: county, state and federal records; along with court records
EXAMINATION: identify title defects; issue preliminary title report or title commitment; identify curative actions
CURATIVE: remove"clouds"; settle existing liens; resolve title issues
CLOSING: transfer ownership; disburse funds