What is Title Insurance?
And Why Do I Need Title Insurance: Title Insurance Explained
Title Insurance is a form of indemnity insurance. The main purpose of title insurance is to prevent losses and eliminate risks due to any past legal defects associated with real property. Title insurance protects the interests of the homeowner and lender (if applicable). Title insurance protects against losses arising from problems with the property title that were unknown when the property was purchased.
Title insurance is a requirement of virtually every lender before it will lend money to buy or refinance a home. The consumer pays for the title insurance policy at closing. Typically your Realtor, attorney, lender, or other settlement service provider orders your title search and title insurance on your behalf early in the closing process, often without your knowledge. By selecting ENTITLE DIRECT you control your closing by ordering your title search and title insurance directly from us – saving you up to 25% on title insurance.
Some common examples of problems covered by title insurance include:
- Improper execution of documents.
- Mistakes in recording of legal documents.
- Mistakes in the indexing of legal documents.
- Mistakes in legal descriptions of property.
- Forgeries and fraud.
- Undisclosed or missing heirs.
- Unpaid taxes and assessments.
- Unpaid judgments and liens.
- Unreleased mortgages.
- Incorrect interpretation of wills.
- Mental incompetence of grantors of property.
- Impersonation of the true owners of the land by fraudulent persons.
- Fraud in securing essential signatures.
Two General Types of Title Insurance Policies
There are two general types of title insurance – lender’s policy and owner’s policy. A lender's policy is issued in the amount of the borrower's mortgage loan amount. It protects the lender up to the amount of the outstanding balance of the mortgage if a title claim is made. If you are financing the property with a lender they will typically require that you purchase a lender's policy. Lenders also require borrowers to purchase title insurance each time they refinance. ENTITLE DIRECT provides significant discounts on title premiums for refinance transactions. As a result, your savings are magnified by using ENTITLE DIRECT for both your home purchase and all subsequent refinances.
An Enhanced Title Insurance Policy may include:
- Post Policy Forgery and Identity Theft.
- Building Permit Violations of Previous Owners.
- Violations of Restrictive Covenants.
- Inability to Access the Property.
- Zoning Law Violations.
Note: Subject to the terms and conditions of the policy.
The Owner's policy provides coverage up to the purchase price of the property. An owner's policy is normally purchased with a lender's policy as part of a purchase transaction. ENTITLE DIRECT offers both Basic Owner's Policies and Enhanced Owner's Policies. Our quote calculator (link to the Get a Quote page) will show you the premium for a Basic Owner's Policy. If you are interested in an Enhanced Owner's Policy, please contact our Specialist Center toll free at 1-877-936-8485 for a free, no-obligation quote. They can also answer any questions you may have regarding the title insurance for or settlement of your upcoming transaction.
While you may find it difficult to obtain samples of title insurance policies from our competitors, ENTITLE DIRECT makes it easy for you. Please click the policy type for samples of the Homeowner's Policy, the Owner’s Policy, or the Loan Policy that EnTitle Insurance Company offers.
Title insurance can be either paid for by the buyer or the seller. In certain areas there are situations where one party will pay for the lender's title policy and the other will pay for the additional amount required to purchase an owner's policy.
Whether you are buying, selling, or refinancing, you will save significantly when you buy title insurance from ENTITLE DIRECT. If you have any questions about title insurance or how we can save you money on title insurance please contact one of our Closing Specialists at 1-877-936-8485.