What is title insurance?
Title insurance is an insurance policy that protects against loss if the
condition of title to the land be different than what was insured.
Why do I need title insurance?
When you buy a home, or any property, you expect to enjoy certain benefits from
ownership. For example, you expect 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.
What if I have a problem? Do I have to lose my property to make a claim?
No. At the mere hint of a claim adverse to your title, 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
What does this cost?
The cost of title insurance varies, mainly depending on the value of the
property. Remember, you only pay for the coverage once, then the coverage
continues for as long as you have an interest in the covered property.
Standard coverage handles such risks as:
- Forgery and impersonation;
- Lack of competency, capacity or legal authority of a party;
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate
officer, or business partner);
- Undisclosed (but recorded) prior mortgage or lien;
- Undisclosed (but recorded) easement or use restriction;
- Erroneous or inadequate legal descriptions;
- Lack of a right of access;
- Deed not properly recorded.
An extended coverage policy may be requested to protect against such additional
- Off-record matters, such as claims for adverse possession or prescriptive
- Deed to land with buildings encroaching on land of another;
- Incorrect survey;
- Silent (off-record) liens (such as mechanics’ or estate tax liens);
- Pre-existing violations of subdivision laws, zoning ordinances or covenants
Subject to availability in your locale, our policy covers all of the risks
listed above, plus:
- Post-policy forgery;
- Forced removal of improvements due to lack of building permit (subject to
- Post-policy construction of improvements by a neighbor onto insured land;
- Location and dimensions of insured land (survey not required).
If you should die, the coverage automatically continues for the benefit of your
heirs. If you sell your property, giving warranties of title to the new 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.
If my lender gets title insurance for its mortgage, why do I need a separate
policy for myself?
The lender’s policy covers only the amount of the 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.
Can you be a little more specific about the types of claims, or risks, covered
by title insurance?
First, there are basically three different levels of coverage: standard
coverage, extended coverage, and our most comprehensive coverage.
Will the ordering process change with the new RESPA requirements?
Mostly, no. Most of the changes involve how and when information is provided by
the lender to the borrower. Monarch Title’s role is affected in that much of the
information the lender uses for the GFE originates with us. The initial
information that the realtor or lender need to provide us remains much the same
though. Our online ordering system is being redesigned to make it even easier
than before for you to place your order with us and know that the information is
complete and ready for processing.