What is Title Insurance?
Title insurance is insurance on the title to property that protects the lender or homeowner in case of title defects. In other words, your policy is an assurance of your ownership interest. A title to property is the very foundation of property ownership - the right to possess and use the property.
What is a title search?
A title search is a detailed examination of the historical records concerning a property, These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to verify the seller's right to transfer ownership, and to discover any claims, defects, and other rights or burdens on the property.
What kinds of problems can a title search reveal?
A title search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the seller, mechanics liens, and restrictions limiting use of the land.
Are there problems a title search CANNOT reveal?
Yes. There are "hidden hazards" that even the most diligent title search may never reveal. For example, the previous owner could have incorrectly stated his/her marital status, resulting in a possible claim by a legal spouse. Other such "hidden hazards" include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names, clerical errors in the records, and defects in executing documents. These defects can arise after your purchase of the property, and can jeapardize your right to ownership. Consequently, title insurance protects against loss, even if a "hidden hazard" results in a challenge to your ownership.
What are the Different Types of Title Insurance?
There are two different types of title insurance:
A lender's policy
An owner's policy
Very simply, a lender's policy protects the lender. The owner's policy protects you. In most cases, mortgage lenders insist on receiving a lender's policy. It protects the lender against title defects that might affect the security of the mortgage loan. It also gives the lender a valid lien on property owned by the borrower in the case of foreclosure. The lender's policy insures only the lender - it does not protect you.
An Owner's Title Insurance policy protects your interest in the property. The policy insures against, for example, defects or errors in recorded documents which might cause your ownership to be questioned or challenged. In addition, it insures you against title defects not shown in public records such as:
Undisclosed Heirs
Forgery
Mental Incompetence
Name Confusion
Fraud or False Representation
Defective Deeds
Marital Rights
Execution by Minor
Why Do I Need Title Insurance?
Careful title examination will not protect you from these types of errors. Nor will a review of the property's ownership history, or the lender's policy. Only an Owner's Title Insurance policy from Covenant Title will give you protection against title defects, many of which could result in loss of title to your home.
If a valid claim is made against your title, and you do not have title insurance, you are responsible for all of the costs including attorney fees, court costs and any payment required to resolve the claim.
What does My Owner's Title Insurance Policy Cover?
Your Owner's Title Insurance policy covers matters affecting access, rights of way, many survey conditions, mechanic's and material men's liens, subordinations, tax liens, prescriptive rights and assessments.
If a claim is made against your title, Owner's Title Insurance protects you by:
At the underwriter's expense, defending your title in court if necessary;
At the underwriter's expense, settling the claim against your title if the claim proves valid. Either the claim will be disposed of or you will be reimbursed.
Your Owner's Title Insurance will stay in force as long as you or your heirs own the property.
How Much Will My Owner's Title Insurance Policy Cost?
As regulated by the Ohio Department of Insurance, title insurance usually costs less than 1% of a property's sale price.
The premium for your title policy is a one-time fee, and is paid in full at the time of closing or within 30 days of your closing date. A rate schedule can be found at the bottom of this page.
When Will My Policy Be Issued?
A policy is issued after title examination and related documents have been executed and recorded following the closing.