The largest purchase that most individuals make during their lifetime is a purchase of real estate. When this purchase does occur, there will be many types of insurance that are necessary in protecting your investment.

Title insurance is one of those insurances that should be purchased. Title insurance is policy of indemnity protecting real estate buyers and lenders from financial loss in the event that issues may develop regarding the rights to ownership of property.

In many cases there are hidden title defects (leins or unpaid taxes, improper ownership records etc.) These defects need to be remedied in order to protect all parties involved in the transaction. The job of the title insurance company is to find and fix these problems before they become further burdensome. The title insurance will protect the buyer and lenders from potential loss going forward.

Lenders Title Insurance Policy Most primary lenders require title insurance policies for their mortgages. This protects them from any loss caused by invalidity or unenforceability of the mortgage lien, which might occur as a result of defective title, or against loss of priority of the mortgage. This provides no protection for the property owner. An Owners Title Insurance Policy will protect the property owner. Owners Title Insurance Policy This insurance is provided at purchase settlements, which protects the purchaser from any loss resulting from a defect in title. We suggest an Owners Policy when there is a transfer in title or removal of one of the property owners. This helps keep the chain of title clean and helps guarantee protection of the property owner.

The first step in receiving a Title Commitment is having a search conducted on the property that you are looking to purchase. A search is a good way to see what liens exist on the property. We typically see mortgages, municipal liens and judgments. Not all properties have these. In fact, most properties have clean titles with only the existing mortgages for the current owner. A Title Commitment is issued after a search has been conducted on the property in question. A Title Commitment is composed of four sections. Schedule A: Details what type of transaction will be taking place, financial information, financial institution that is being insured, owner information, and property information. Schedule B, Section I Lists requirements that will be needed to be satisfied in order to go to settlement. Some examples of items that need to be satisfied are: Current Mortgages Municipal Liens Judgments Corporation Information Most of these requirements are taken care of by the title company. Schedule B, Section II Lists exceptions to the property in question that appeared in the original Deed. Additional exceptions may occur over the course of the property’s existence. Schedule C This is the property legal description. It may not be exactly the same as the original Deed description. Parts of the property may have been deeded out throughout time.