How does title insurance differ from other types of insurance?
Title insurance is different from other types of insurance, in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life or health cover you against losses that may occur in the future. Title insurance doesn’t protect you from any future faults, it looks back in time. With title insurance you pay a one time premium at closing. It protects you from risks or undiscovered interests. There are two principle forms or title insurance. A Lender’s policy and a Owner’s policy
What is a Lender’s Policy?
A: A Lender’s policy protects the mortgage holder. If there is a fault in the title that results in a loss, the Mortgage holder will be paid back.
What is an Owner’s policy?
An Owner’s policy protects you, the purchaser, against a loss that may occur from a fault in your ownership or interest you have in the property. Protect the equity in your new home with a Title Policy.
What does an Owner’s Title Policy Provide?
Protection from financial loss due to demands that may be charged against the title to your home, up to the amount of the title policy. Payment of legal costs if the title insurer has to defend your title against a coverd claim. Payment of successful claims against your home covered by the policy, up to the cost of the policy.
What “Hidden Risks” are protected under a title Policy?
- False impersonation of the true owner of the property by the seller or other persons previously in title.
- Forged deeds, releases, and other documents / Fraud
- Deeds by persons of unsound mind or by minors.
- Invalid documents completed by an expired attorney.
- Invalid deeds delivered after the death of the grantor.
- Deeds by supposedly single persons but actually married.
- Claims for unpaid inheritance and gift taxes against prior owners of your home.
- Unrecorded easements – giving another party the right to enter another party’s property.
- Undisclosed descendants or former owners of your home or land on which it is situated.
How long does my coverage last?
Once purchased, title insurance, remains in effect for as long as you own your property. Title insurance adds security and peace of mind to home ownership.
How do I obtain Title Insurance and what does it cost?
Let your realtor know you want to purchase an Owner’s Title Insurance Policy. When choosing a title insurer, you should look for a company with experience, as well as the financial strength to protect you. Roaring Brook Abstract Company, Inc. writes title insurance for First American Title Insurance Company, one of the largest and most financially secure title insurance companies in America.
In Pennsylvania The Title Insurance Rating Bureau of Pennsylvania (TIRBOP) and the Pennsylvania Department of insurance control the premiums all title insurance agents in Pennsylvania can charge for policies. You only pace this premium once. The rate depends on the purchase price of the property, and your policy amount must be equal to the purchase price of the mortgage amount, with limited exception.