"WHAT IS TITLE INSURANCE? WHY DO I NEED IT?"www.sapphiretitleescrow.com
Title insurance is meant to protect an owner or lender's financial interest in real property
against loss due to title defects, liens or other matters. It will defend against a lawsuit
attacking the title, or reimburse the insured for the actual monetary loss incurred, up to
the dollar amount of insurance provided by the policy. There are typically two types of
policies, owner and lender.
Title insurance is your only protection against loss or damage from any claims of
ownership that may still exist against the title to your property. A title search and
examination done on the property may show problems such as liens, unpaid taxes,
outstanding mortgages, or a judgment against the seller, boundary/survey disputes,
undiscovered wills, etc. Title insurance premiums are only paid once, unlike other
insurance premiums. It is usually paid at time of closing and will remain in effect as long
as you retain interest in the property.
An owner's policy, also called owner's title
insurance, is usually issued in the amount
of the real estate purchase. An owner's
policy is the only means of protxtion for a
buyer should a title problem arise. Such
problems include errors in deeds,
mistakes in examining records, forgery,
and undisclosed heirs.
Lender's title insurance is referred to as a
lender's policy and is usually based on the
dollar amount of the loan. It does not
protect the buyer, it only protects the
lender should a problemwith title arise.
The policy amount decreases as you pay
down your loan.