Smart FAQs on Title Insurance

WHAT IS TITLE?  

Title refers to the person who has legal ownership over a property. The seller is typically required to provide a marketable title. This means the title can be transferred to the buyer without the likelihood that another party can make a claim on it.

WHAT IS TITLE INSURANCE?

Title insurance is a way to legally protect oneself against losses in the event that there is a defect in a property title.  

WHY DO I NEED TITLE INSURANCE?

When you purchase a home, you want to be sure the title is free and clear. Title insurance provides important protection against unknown or unrecorded defects that may affect the title to your property. Some potential hidden title problems may include errors or omissions in deeds, mistakes in examining records, forgery, or undisclosed heirs. An owner's policy is the only way to fully protect the buyer should a covered title problem arise with the title in the future. Click below to get a quote and find out how much an owner’s policy will cost.

WHY DO I ALSO HAVE TO PURCHASE LENDER’S TITLE INSURANCE?

Lenders also need to protect themselves against possible title defects. At times, a lender may sell loans to secondary investors, in which case the new lender will require that the loan has title insurance.

WHAT IS THE DIFFERENCE BETWEEN A LENDER’S AND AN OWNER’S TITLE POLICY?

A lender’s policy protects the financial institution that holds the mortgage. In the event that a fault is found in the title that results in a loss, the mortgage holder will be paid back.

An owner’s policy protects you, the homebuyer, against a loss that may occur from a fault in the property. A title policy will protect the equity or interest in your new home.

CLICK HERE to compare coverage for different title policies here. CLICK HERE to generate a quote.

HOW LONG IS THE TITLE INSURANCE POLICY VALID?

An owner’s title insurance policy is active for your lifetime and can even extend to the lifetime of your heirs.

WHAT TITLE ISSUES CAN SURFACE DURING THE TITLE SEARCH PROCESS?

Several scenarios could create a title issue, including but not limited to:

  • A forged will or deed

  • A title transfer by someone underage

  • A married person conveying real estate without his or her spouse

  • Fraudulent impersonations

  • Secret marriages

  • Undisclosed heirs

  • Invalid divorces

  • False affidavits

WHAT ARE EXAMPLES OF WHAT A TITLE POLICY WOULD PROTECTS AGAINST?

A title insurance policy will protect you against a variety of defects, including but not limited to:

  • False impersonation of the property owner by the seller or other persons previously named in the title

  • Forged deeds or other documents

  • Deeds by persons of unsound mind

  • Deeds by minors

  • Invalid documents completed by an expired attorney

  • Invalid deeds delivered after the death of the grantor

  • Deeds by supposedly single persons who are actually married

  • Fraud

  • Claims for unpaid estate inheritance and gift taxes against prior owners of your home

  • Unrecorded easements (giving one party the right to enter another party’s property)

  • Undisclosed descendants of former owners of your home or the land on which it is situated

APPROXIMATELY HOW MANY CLAIMS ARE MADE WITH TITLE INSURERS PER YEAR?

According to American Land Title Association (ALTA), title insurers paid approximately $460 million in claims in 2011. This total increased more than $100 million compared to the previous year. Compensation was paid to insured homeowners for one of two reasons: rectify losses they experienced under their policies or to defend their titles from the others’ claims. The ALTA also states that a title problem could arise in one out of every four real estate transactions.  

WHAT KIND OF TITLE POLICIES DOES SMART SETTLEMENTS OFFER?

Smart Settlements offers two kinds of owner’s title insurance policies: a standard package and an enhanced package.

CLICK HERE to compare coverage for different title policies here. CLICK HERE to generate a quote.