Title insurance protects you against losses resulting from claims against your ownership of your property. It is different from other property insurance coverages because title insurance provides coverage for problems or “hidden risks” that have occurred prior to you taking ownership of the title to the property, that can adversely affect your ownership rights. Title insurance helps protect your ownership not only in land but also improvements located on it. Title insurance coverage includes:
• Protection from financial loss due to covered claims against your title, up to the face amount of the policy.
• Payment of your legal expenses if the title insurance company is required to defend your title against covered claims.
Policies guarantee the absence of undisclosed liens and problems with rights of ownership, as well as protecting possession, control and disposition rights. It guarantees that you own your property, subject to any restrictions or liens you have caused to be placed or assumed on the property.There are two title insurance policies, Lender’s Title Insurance and Owner’s Title Insurance. TitleQuest offers lender’s and owner’s title insurance from multiple highly rated national underwriters.
Lender’s title insurance protects your lender against title problems affecting your property that could cause a loss to your lender for the life of the mortgage. Lender’s title insurance is a requirement of the loan, in order for the lender to loan the money needed to purchase real estate. A lender’s policy coverage is based on the amount of the initial mortgage amount and decreases over the life of the loan as the balance decreases. The lender’s coverage terminates when you pay off the mortgage in full.
As lender’s title insurance only covers claims that affect the lender’s loan, to protect yourself, you may want to purchase owner’s title insurance.
An owner’s title insurance policy protects an owner of real estate against prior (before an owners acquire title) unreleased liens affecting title to the property as well as claims against the title by prior owners or their undischarged heirs. It not only covers the owner for as long as they own the property but continues to protect them after they sell the property should subsequent purchasers not obtain owners title insurance and sue them under the terms of General Warranty Deeds that commonly convey real property.
The owner’s policy remains in effect as long as you or your heirs have an ownership in the property. Purchasing an owner’s policy can also save you money if you decide to refinance your property in the future.
There are two types of owner’s title insurance options: Standard and Enhanced.
When you refinance your home, you are required to purchase a new lender’s policy. Because your prior policy only covered the life of your first loan and you are ending it, you will need a new policy one to cover the life of the new loan. You do not need to purchase a new owner’s policy.