About Title Insurance

What is Title Insurance?

Title Insurance is the protection of your right of ownership in the property you buy against hidden title defects or claims.  It is issued after a search of the public records for past deeds, taxes, assessments, judgments, bankruptcies and tax liens and determines who holds title to the property and what encumbrances and liens must be addressed.  The title closing agents then close the transaction and record the documents with the County Recorder or Registrar of Titles, which transfers the title to you.  Subsequent to the recording of the documents, the title insurance agent issues a title insurance policy, insuring your record title interest in the property.

What is a Title Search?

Before title insurance can be issued, an extensive search of public records is performed.  This search includes examining the records at the County Recorder or Registrar of Titles offices, District Court judgment searches and appropriate tax lien searches.  This process is meant to discover any title defects and address them prior to closing, safeguarding your investment from financial laws.  By performing the necessary title searches, the title insurance company can guarantee that you will obtain clear title to your property. 

Types of Title Insurance

There are two types of title insurance policies:  a lender’s or mortgagee’s policy; and an owner’s policy. 

A lender’s policy protects the mortgagee (the lender) or its assigns from defects in title that may result in a loss of priority or validity for the mortgage.  Coverage under this policy is limited to protecting the lender’s interests.  In the event of a loss or defect, only the lender’s interest is protected.

An owner’s title insurance policy insures the interest of the owner for as long as the owner or his or her heirs has an interest in the property.  The owner’s policy protects the owner against loss or damage due to undiscovered title defects.  It acts as an investment shield from many errors that may occur during a transaction or may have occurred in the past, such as:  mistakes in recording of legal documents; forged deeds, releases or wills; undisclosed or missing heirs, including spouses; deeds by individuals of unsound mind or minors; deeds executed under an invalid or expired power of attorney; liens for unpaid taxes; and fraud.  The owner’s policy insures the marketability of title to the property as of the date of your purchase.

Both lender’s and owner’s policies provide “Gap coverage.”  Gap coverage is coverage for the period from the time of the closing to the time the documents are recorded.  During this time other documents may be recorded that could affect the priority or validity of a mortgage or deed.  Gap coverage is provided to you to protect you from any potential loss during this time. 

Simultaneous issue rates are available to customers who purchase both an owner’s and lender’s title insurance policy at the same time.  Lenders require that borrowers purchase a lender’s title insurance policy to protect the lenders interest at the time of closing.  If you purchase an owner’s policy at that time, you will realize a substantial savings in the cost of title insurance for both policies, as the simultaneous issue rates are in effect. 

Download Application for Title Insurance (pdf 75K)