Title Insurance
Title Insurance
Free Estimates | Best Practices Certified by ALTA | Over 30 Years of Experience
Free Estimates
Best Practices Certified by ALTA
Over 30 Years of Experience
What Is Title Insurance?
A title insurance policy is a policy of insurance. It is the agreement by the title insurance company to pay monetary damages up to the face amount of the policy if there are any covered losses under the terms of the policy arising from the state of the title of the real property.
The policy in addition, covers the cost of defense of the title of the insured property from any claim against the title not specifically excepted from coverage upon due and timely notification to the insurer.
A purchaser expects to obtain full title to real property unencumbered by easements, covenants, restrictions, governmental regulation, liens, or any other title defect.
A lender expects that the title of the real property is such that no objection will be made by a purchaser in the event that the lender is forced to foreclose its mortgage. All insured expect that if there is a title loss, the matter will be defended by the title insurer, and in the event of a loss, the title insurance company will pay the loss.
Title insurance is based on the theory of “loss prevention,” which means that the greatest amount of time, and money, is spent preventing title problems from ever occurring in the first place. According to an American Land Title Association (ALTA) survey, one out of every four real estate transactions shows evidence of title problems.
You may not even be aware that a problem exists, as title companies make every effort to ensure the property is free of all possible title problems before issuing the title insurance policy.
Preventing potential loss and subsequent claims is a highly labor-intensive and expensive component of a title company's operating budget. One reason is that in order to maintain current records, which are critical to the accuracy of a title search, new documents must be updated and indexed daily. Skilled and trained researchers and underwriters must interpret the effects of these documents on the title.
Northway Title Agency has title insurance underwriters and agents who have over 30 years of experience in the field. Call us
today to get a FREE estimate.
What Are Common Title Problems?
Forged documents, one of the most common title problems found, in addition to falsified documents, invalid deeds, and incorrect property descriptions, are just some of the title issues which must be examined.
Other title risks include recording mistakes, deed indexing errors, unpaid mechanics' liens, judgment liens, income tax or property tax liens, undisclosed easements, claims by missing heirs, and claims by ex-spouses.
The cost of a title insurance policy relative to the cost of a property transaction is about one-half to one percent of the purchase price. The premium price is based on four factors, starting with the largest percentage and descending to the smallest:
- The cost of searching and examining the title to subject properties
- The cost to resolve or clear defects to the title
- The claims costs covering title defects, including legal fees
- The allowance for a reasonable profit.
What a Title Policy Can and Can't Do
- A title insurance policy is a policy that indemnifies an insured against an actual financial loss up to the value of the property or the policy limits, whichever is less, caused by a defect in title covered by the policy (i.e., not excluded or excepted from coverage).
- A title policy does not guarantee that title is marketable, that there are no record liens and encumbrances or that the title insured is fee simple absolute.
- A title insurance policy does not insure against torts such as trespass or theft of timber.
- A title insurance policy does not insure against any defect in title occurring after the date of the title policy.
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Northway Title Agency
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