What is Title Insurance?
"Title Tuesday" begins with an overview of What is Title Insurance.
Title Insurance is an insurance product you purchase by paying a one-time premium at closing. Title insurance is required by all institutional lenders and protects both the lender and the purchaser against defects in title that could cause a claim to be made against the purchaser. In the process of issuing title insurance, the title company performs searches of the property to identify any mortgages, liens, judgments, easements etc. Based on this search the title company creates a title report or commitment which is essentially a checklist of items that are required to be cleared up prior to closing. In addition to issuing a policy, the title company will search municipal records including taxes and collect and record all the necessary documents to effectuate the closing including the payment of real estate taxes.
In short, title insurance protects a homeowner
against future claims and secures
their hold to the property .
Why do Home buyers Need Title Insurance?
OWNERS: It protects their interest against loss due to title defects, liens or other matters that may already exist in the title prior to their purchase of the property
LENDERS: If the home buyers are getting a mortgage the lender will require the borrower to buy an additional policy that protects the lenders interest in the property
Title Insurance covers the cost of the legal defense to protect their interest
What Title Insurance does NOT cover?
- Municipal Searches - these are provided for information only and are NOT insured
A typical residential municipal package includes the following:
• Copy of Certificate of Occupancy Search "CO"
• Building Violation Search - any filed building violations on record
• Street Maintenance Search - who takes care of the Road
• Fire Violation Search
- Zoning is not search or insured
- Rights of Tenants or persons in possession
- Water Charges after the last actual reading
- Other matters specifically excepted from the file (Covenants and Restrictions, Easements, etc.)