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Title Insurance Q: What is
title insurance?
A: An insurance policy--protecting against loss
should the condition of title to land be other than as insured.
Q: Why do I need title insurance?
A: When you buy a home, or any property for that
matter, you expect to enjoy certain benefits from ownership. For example, you
expect to be able to occupy and use the property as you wish, to be free from
debts or obligations not created or agreed to by you, and to be able to freely
sell or pledge your property as security for a loan. Title insurance is designed
to cover these rights you bargain for.
Q: What if I have a problem? Do I have to lose
my property to make a claim?
A: Not at all. At the mere hint of a claim
adverse to your title, you should contact your title insurer or the agent who
issued your policy. Title insurance includes coverage for legal expenses which
may be necessary to investigate, litigate or settle an adverse claim.
Q: What does this cost?
A: The cost varies, depending mainly on the value
of your property. The important thing to remember is that you only pay once, and
then the coverage continues in effect for so long as you have an interest in
covered property. If you should die, the coverage automatically continues for
the benefit of your heirs. If you sell your property, giving warranties of title
to your buyer, your coverage continues. Likewise, if a buyer gives you a
mortgage to finance a purchase of covered property from you, your coverage
continues to protect your security interest in the property.
Q: If my lender gets title insurance for its
mortgage, why do I need a separate policy for
myself?
A: The lender's policy covers only the amount of
its loan, which is usually not the full property value. In the event of an
adverse claim, the lender would ordinarily not be concerned unless its loan
became non-performing and the claim threatened the lender's ability to foreclose
and recover its principal and interest. And, in the event of a claim there is no
provision for payment of legal expenses for an uninsured party. When a loan
policy is being issued, the small additional expense of an owner's policy is a
bargain.
Q: Can you be a little more specific about the
types of claims, or risks, covered by title insurance?
A: Sure. First understand there are basically
three different levels of coverage: Standard coverage, extended coverage, and
our most comprehensive "EAGLE Policy" coverage.
Standard
Coverage Handles Such Risks As:
An extended coverage policy may be requested to
protect against such additional defects as:
Subject to availability in your locale, First American's EAGLE Policy covers
all of the risks listed above, plus:
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