Frequently Asked Questions
What is Title Insurance?
Title is the legal evidence, of right, that a person has to the ownership and possession of land. Since it is possible that someone other than the seller has a legal right to the property you’re buying, the premium coverage offered by the EHP Policy provides you added peace of mind. There can be any number of problems that remain undisclosed even after the most careful search of public records. These hidden “defects” are very dangerous and sometimes are not discovered for months or even years after you purchase your home. You could be forced to spend substantial money on a legal defense to protect your rights. The EHP Policy helps protect you against losses and defects and provides legal defense for coverage risks.
Do I need title insurance?
Most definitely! Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights of ownership to your property. In addition to protection from financial loss, title insurance pays the cost of defending you against any covered claim.
But the lender already requires title insurance. Won't that protect me?
Your lender only requires that you purchase a Loan Policy. A Lender’s Policy insures that your lender has a valid lien on the property It does not protect you! An Owner’s Policy, on the other hand, protects your interest in the property. Title troubles, such as someone claiming an ownership interest in your property, forgeries in the chain of title, unmarketability of your title, or pending legal action (among a variety of other potential problems), could put your equity at serious risk. If a valid claim is filed, in addition to covering the financial loss up to the face value of the policy, your owner’s title policy will pay for the cost of legal defense.
How much does title insurance cost?
The single premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time-only expense, paid when you purchase your home. Yet it continues to provide complete coverage for as long as you or your heirs own the property.
What can cause a title issue to arise?
There are any number of problems that can adversely affect the title to your property, for instance the following are some common causes of title issues:
- Someone claiming an ownership interest in your title
- Leases, contracts or options affecting your title
- Someone claiming to have rights affecting your title due to forgery or impersonation
- Someone having a right to limit your use of the land
- Unmarketability of your title
- A defective title
- Unreleased deeds of trust granted by prior owner(s)
- Unreleased judgements against prior owner(s)
- Claims made by mechanics or materialmen who performed work for a prior owner