Real Estate ProfessionalsAgents | Lenders | Attorneys

Title insurance is an agreement to indemnify against damage or loss from a defect in title as evidenced by a policy of title insurance to a specific parcel or real property. Following a search and examination of public records and in exchange for a premium paid, title insurance companies will assume the risk that title to a parcel of real property is as stated to be in the policy of title insurance.

Title companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders and others who have an interest in the real estate transaction. Title companies provide assurances that the transfer of title takes place efficiently and that your interests as an insured are protected under the terms and conditions of the policy. Title insurance is different from many other types of insurances (casualty, auto, etc.). These other types of insurances assume risks by providing financial protection for losses arising from an unforeseen future event such as a fire, theft or accident. With title insurance, risks are examined and mitigated before the property changes hands.

Types of Title Insurance (Policies)

Owner’s Policy

Insures an owner of any type of real property against loss by reason of those matters covered under the policy of insurance for as long as they own the property. There are several versions of each policy. Consult with your Real Estate Professional to determine which policy is best for you.

Lender’s Policy

Insures the priority of the lender’s security interest over claims that others may have in the property.

FREQUENTLY ASKED QUESTIONS About Title Insurance

Q: What does title insurance insure?

A: Title Insurance offers protection against claims resulting from various defects (as set out in the policy) which may exist in the title to a specific parcel of real property effective on the issue date of the policy. For example, a person might claim to have a deed or lease giving them ownership or the right to possess your property. Another person could claim to hold an easement giving them a right of access across your land. Yet another person may claim that they have a lien on your property securing the repayment of a debt. That property may be an empty lot or it may hold a 50-story office tower. Title companies work with all types of real property.

Q: How much can I expect to pay for title insurance?

A: Although the title company or escrow office usually serves as a meeting ground for closing the sale, only a small percentage of total closing fees are actually for title insurance protection. Your title insurance premium may actually amount to less than one percent of the purchase price of your home and less than ten percent of your total closing costs. The title policy is good for as long as you and your heirs own the property with the payment of only one premium.

Q: Who will pay for title insurance charges, the buyer or the seller?

A: Surprisingly, “who pays” is not uniform. In some areas the buyer will pay while in others the seller will pay. In some places, the seller will pay for the owner’s title policy and the buyer will pay for the lender’s policy. But in every case, the question of who pays closing costs is a matter of agreement between the buyer and seller. Usually this agreement is based on the customary practice in your area.

Buying a home is an exciting and emotional time for many people. To help you buy your home with more confidence, make sure you get owner’s title insurance. Here’s why it’s so important for you:

1. Protects Your Largest Investment

A home is probably the single largest investment you will make in your life. You insure everything else that’s valuable to you—your life, car, health, pets, etc., so why not your largest investment? For a onetime fee, owner’s title insurance protects your property rights for as long as you own your home.

2. Reduces Your Risk

If you’re buying a home, there are many hidden issues that may pop up only after you purchase your home. Getting an owner’s title insurance policy is the best way to protect yourself from unforeseen title discrepancies. Don’t think it will happen to you? Think again.

Title claims can include:

• Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
• Pending legal action against the property that could affect you
• An unknown heir of a previous owner who is claiming ownership of the property

3. You Can’t Beat the Value

Owner’s title insurance is a one-time fee that’s very low relative to the value it provides. It typically costs around 0.5% of the home’s purchase price.

4. Covers Your Heirs

As long as you or your heirs own your home, owner’s title insurance protects your property rights.

5. Nothing Compares

Homeowners insurance and warranties protect only the structure and belongings of your home. Getting owner’s title insurance ensures your property rights are protected.

6. 8 in 10 Homebuyers Agree

Each year, more than 80% of America’s homebuyers choose to get owner’s title insurance.

7. Peace of Mind

If you’re buying a home, owner’s title insurance lets you rest assured, knowing that you’re protected from inheriting possible debts or legal problems, once you’ve closed on your new home.

Homeowners Insurance protects you from what might happen. Title Insurance protects you from things that have already happened, but are unknown or hidden.

Homeowners Insurance Covers Things Like…

• Damage to the contents of your home
• Theft of personal property in your home
• Living expenses if your home is uninhabitable
• Damage to your home caused by fire, hail, windstorm and vandalism
• Personal liability for bodily injury or accidents to guests in your home
• Structural damage to your home or detached structures

Title Insurance Covers Things Like…*

• A defect in title caused by forgery, fraud, undue influence, duress or incompetency
• A defect in title caused by undisclosed prior mortgage or other liens
• No right of access to and from the land
• A defect in title caused by improper execution of documents
• < A defect in title caused by documents not being properly filed, recorded or indexed in the Public Records/li>

THE SEARCH MAY HAVE BEEN LONG, BUT YOU’VE FINALLY FOUND THE HOME OF YOUR DREAMS.

You love its style, floor plan, and views. The neighborhood looks great. You’ve also done the hard work of reaching an understanding with the seller on price, signed a purchase agreement, and made an earnest money deposit. The home inspection went well, your loan has been approved, and your excitement builds as the big day of closing approaches. For most of us, the purchase of our home is the single biggest investment we ever make, which is why no one wants any last-minute problems to threaten the transaction. Please take a moment to review these points. They will help ensure a successful, trouble-free transaction.

DO I NEED OWNER’S TITLE INSURANCE?

Most definitely! Title insurance is a means of protecting yourself from actual financial loss in the event that problems develop regarding the ownership rights to your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from a covered financial loss, title insurance pays the cost of defending you against any covered claim.

BUT THE LENDER ALREADY REQUIRES TITLE INSURANCE. WON’T THAT PROTECT ME?

No. There are two types of title insurance. A Lender’s Policy only insures your lender that the mortgage it gave you is a valid lien on the property. Most lenders require this type of insurance and will typically require the borrower to pay for it.

An Owner’s Policy, on the other hand, protects your ownership interests in the property. Title troubles from previous owners, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to covering any actual financial losses up to the face value of the policy, your title insurer has a duty to defend you against any covered claims.

SHOULD I SHOP AROUND FOR THE BEST TITLE INSURANCE DEAL?

Absolutely. Some states closely regulate rates. Others permit open competition, which often results in significant differences in rates and services. Depending where you live, it pays to investigate your options carefully in order to obtain the most complete coverage and the best service. You also want to work with a title insurer that responds readily to your needs and performs its complex tasks with great accuracy. It is vital, too, that you choose a title insurance company with the financial strength and stability to meet its obligations, through good times and bad, over the long term.

CAN MY TITLE COMPANY HANDLE THE SETTLEMENT?

Yes, in most areas of the country, Old Republic Title and its agents act as a central clearinghouse for the parties involved— collecting necessary documents and providing customary settlement services. We are fully prepared to work with you from the beginning of your transaction all the way through to conclusion. When you work with your friends at Old Republic Title or its agents, you can be confident that you are working with those knowledgeable in how to ensure a successful transaction.

AT A MINIMUM, YOU WILL WANT TO HAVE THE FOLLOWING ITEMS COMPLETE OR IN HAND WHEN YOU COME TO THE CLOSING (PLEASE CONFIRM WITH YOUR SETTLEMENT OFFICER, AS PRACTICES VARY BY STATE):

BUYER

• Wire or cashier’s check for amount due to settle.
• Proof of purchase of insurance for fire, casualty, etc.
• Photo identification (passport, driver’s license, or state-issued identification card), 2 forms of Identification
• Documentation required by the lender, even if already provided

SELLER

• Invoices for any unpaid taxes, utilities, assessments and latest utilities meter readings
• Receipts for paid taxes and assessments
• Proof of satisfaction of any mechanics’ liens, mortgages, home equity lines of credit, judgments, or loans that were paid prior to the closing
• Photo identification (passport, driver’s license, or state-issued identification card), 2 forms of Identification
• Wire or cashier’s check if you need funds to settle

Fraud is on the rise and now coming via text message with hackers posing as real estate professionals or title companies to trick customers into wiring closing funds to their accounts. Below are common “red flags” associated with these schemes, and tips for how to avoid becoming a victim.

UNSECURE EMAIL ACCOUNTS

• Be suspicious of any party that uses free, web-based email accounts for business transactions. These accounts are easily breached.

CHANGES OR ANOMALIES

• Watch for the word “kindly” in communications. While it is a nice word, it is unnecessary and outdated in American conversation, but it tends to be used in overseas phishing schemes.

• Pay careful attention to all email addresses throughout the transaction to make sure they are legitimate. Hackers often email from unsecure domains or fake domains that closely resemble real ones to trick their victims.

• Watch for sudden changes in grammar, terminology and verbiage. Be wary of spelling or grammatical errors, requests for secrecy or pressure to take action quickly.

• Be suspicious of emails that arrive at odd hours of the day or night.

PAYMENT INSTRUCTIONS

• Be wary of unusual payment amounts or payment requests to odd parties, unusual persons or international wires.

• Review the name(s) on all bank accounts. Does it match the name(s) of the party(ies) involved? Is it worded strangely?

• Always verify changes to payment instructions and confirm requests for transfer of funds from any party – especially last-minute wiring changes from financial institutions.

HOW TO AVOID WIRE FRAUD

• Slow down. Moving too quickly and not verifying information leads to mistakes.

• Err on the side of caution. Assume anything suspicious is fraud.

• Never reply to a suspicious email or act on any of the information in the message.

• Pick up the phone. Call all parties involved in the transaction using previously known, verifiable phone numbers before closing. Do not just confirm that wiring instruction were changed, verify that the account information in the instructions are correct.

• If you suspect fraud, act immediately. Contact your local law enforcement authorities, and file a complaint with the FBI’s Internet Crime Complaint Center (IC3).