What is Title Insurance

During a title search, an examiner looks at the ‘chain of title,’ working backwards from the current owners to the chain of previous owners until they reach the point where the land was granted or sold. Title searches are usually conducted by attorneys, title companies or title specialists to look for anything which would ‘cloud’ the title. Title insurance is a one-time insurance premium and the cost is based on the cost of the home. It protects the home buyer from any losses with the cost of any errors made during the search and it protects the lender’s interest in the home. Some of the problems that would be covered include fraud, forgery, judgments, unpaid taxes, liens and other defects.

There are two types of policies – an owner’s policy and a lender’s policy. The policy never expires for the buyer; it even protects the heirs. A lender’s policy expires when the mortgage is satisfied (paid up).

Usually the seller is responsible for providing title insurance to the new owner. To determine the price for the title insurance, the title company needs to know the sale price of the home, the county, whether there is prior title evidence and how old the prior title is.

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