Frequently Asked Questions
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- What does title insurance insure?
- It insures your legal ownership of the house or property you buy.
- Doesn't my deed do that?
- No, a deed doesn't insure ownership. A deed shows you own the property to the
same extent as the person who sold it to you.
- What's that mean?
- It means if somebody else had a claim on the property before you bought it,
he'll still have the same claim after you've bought it.
- Who else could have a claim?
- The county could have a claim for previously unpaid taxes on the property.
An earlier lender could have a claim because part of a mortgage was unpaid.
A contractor or supplier could have a claim by means of mechanics lien for labor or material furnished.
A home remodeling company could have a claim because it hadn't been paid for fixing a foundation, adding a second story, putting on a family room or other work.
Your new neighbor could even have a claim. For example, suppose he and a previous owner had both agreed to leave certain space on their respective lots open (for a common driveway, for instance). If
the previous owner of your property used any of that agreed-upon space to build a structure, you would be liable for suitable payment to your neighbor.
- Yes, but has anybody ever really lost property that way?
- Abraham Lincoln did. And he was a lawyer.
- OK. But suppose I've got an abstract of title. Are you saying that doesn't assure ownership? That I can't have confidence in my abstracter?
- Far from it. You can have full confidence in any abstracter. A title insurance company certainly does. We use professional services for Title Insurance,
but it's unfair to expect from a professionally drawn abstract something it was never designed to provide. An abstract is an outline--a kind of summary--
of what's in public records. It can't be expected to guarantee the records are correct--or complete. What's more, there are some off-the-record risks that don't even show up in an abstract.
- What off-the-record risks don't show up in an abstract?
- They are too numerous to mention. Any one of them could mean loss of title to a buyer. Title could have been obtained by fraud or by forgery. By the fact that a minor conveyed the title.
There could have been errors of record, or errors in clerical work. There could have been undisclosed heirs, a mistake in legal interpretation, confusion in similar names, mental incompetence, and others.
- How does "Title Insurance" protect me against such risks?
- We guarantee you against all defects in or claims against your title. If your title is attacked, "Title Insurance" from professional title agencies defends it, assumes all legal expenses, and pays you promptly in case of loss.
- You mean the title insurance company would pay legal and court expenses--then pay me for the property--if my property were lost through a defect in a title?
- Does "Title Insurance" protect only the buyer?
- No. It can protect lenders too. In fact, it is a common practice for lending institutions to take title insurance on property they are lending money to buy. Thus, if a hidden defect or claim against the property should surface later on, the lender will be protected against loss.
- Does that mean a buyer need not take title insurance if the lender does?
- Not unless the buyer doesn't care about insuring his investment as much as the lender does. Both the buyer and the lender need this low cost yet vital protection because both can have substantial financial interests in the property.
- How are fees for title insurance paid?
- There's only one fee. It's paid when the title insurance is obtained. There's no renewal. Your insurance lasts forever.
- If I have title insurance, will old questions ever be raised against my title in the future?
- No. If old claims are established, it is the duty of the title insurance company to eliminate them, thus assuring you a full, claims-free title to your property.
- How can I get title insurance--or additional information--from Land Title & Closing?
- Click on Contact Us at the top of the page!