• Debbie Ferraro

Types of Title Insurance in 2021

Updated: Sep 29, 2021

Navigating the process of buying or selling a home is difficult, even without unexpected problems arising. If there’s a problem with your property’s title, title insurance is designed to protect not only your lender or investor, but your interests as well.

What is Title Insurance?

When you purchase a property, you also receive a certificate that gives you the legal right to own that land. This document is known as a title, but sometimes unexpected complications can arise and someone else might try to claim ownership. In the event of a dispute, the title insurance company will take up your case, and may either fight for you in court or compensate your financial losses.

There are Two Types of Title Insurance

In order to purchase or refinance your home or property, you may need to purchase a title insurance policy. The first type of title insurance is known as lender’s title insurance, and most lenders require it as a condition for receiving a loan to protect them from expenses.

The second type is owner’s title insurance, and it protects your own financial investments in the property. Although obtaining this title insurance is technically optional, the one-time fee you pay for it could save you thousands of dollars if problems with the title should arise.

Common Title Issues

Before closing on a home or property, a thorough title search should always be conducted to examine past ownership to help ascertain the chances of future title defects. In some cases, discovering these problems may help lower the price when purchasing a home.

Title insurance is designed to protect policyholders from unexpected title problems after a purchase, and is ineffective for issues that arise during the title search. There are several potential issues title insurance covers:

  1. Omitted Heirs that may come forth claiming all or partial ownership of the estate due to the will of a previous owner.

  2. Fraud that was committed during a previous transaction. This may be as simple as a falsified signature somewhere in the line, or as complicated as a previous seller never having ownership of the property.

  3. Debts incurred by the previous owner. The property owner may have outstanding dues that keep them from selling the home, such as child support payments or back property taxes.

  4. Public record errors that may incorrectly list the history of the title. This may result in an inaccurate title search that did not inform you of issues with the property’s ownership.

In the event of any of these cases, the first thing you should do is call your title insurer to determine your next steps.

How Much is Title Insurance & How Long Does it Last?

The cost of title insurance is relative to the price of the property being insured, but the home’s location and who you buy your insurance from can factor in as well. Typically, a lender’s title insurance policy is less expensive than the optional owner’s policy, and the rates can range anywhere from $300 to $2500 or more. You can request a quote to see how much title insurance will cost for you.

Unlike many policies such as homeowners insurance or health insurance, title insurance is a one-time premium and does not require additional payments to remain active. After purchasing your policy at the time of closing, you’ll remain protected for as long as you own the property.

American Guardian Title Specializes in Title Insurance

Title insurance can be difficult to understand, but the team at American Guardian Title is ready to help. We tailor closings to our client’s needs, and have a variety of policies and resources to help make the process of buying or selling your home a breeze. We offer a standard title insurance policy based on the price of your home at the time of closing, as well as an enhanced policy that escalates with the value of the home over time. Call us at 833-331-8476 or contact us online to see how title insurance can protect one of the biggest investments of your life.