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What is Title Insurance?
Title Insurance is an insurance policy that protects you against loss arising from problems connected to the title on your property.
Long before you purchase your home (even new construction)…..the land has gone through many ownership changes. Any weak point in the link could cause problems. For example, someone could have forged a document at some point in the past…..or there may be unpaid real estate taxes. Title Insurance will cover the insured party for any claims and legal fees stemming from such issues.
Your lender will require a Title Insurance Policy to protect themselves. It’s fairly expensive and so we always ask the seller to provide this for you. This “Lender’s Policy” protects the lender, but doesn’t protect your equity in the property. I suggest that you purchase an “Owners Policy” for yourself as well…..for the full value of the home. If it is ordered at the time as the lender’s policy, you can usually obtain a simultaneous issue for approximately $50.00. It’s a wise investment for such a relatively small amount of money. 
Builders usually don’t provide title insurance with a new home, so you should plan on paying for this as part of your closing costs.
The coverage lasts as long as the owner or any heirs have an interest in or any obligation with regard to the property. Coverage extends up to the date the policy is written, but will not cover anything that arises after that date. Therefore, when the home is sold or re-financed …..a new title insurance policy will have to be purchased.
The standard title insurance policy does not protect against false claims that arise after the property is purchased. Many events beyond your control can reduce the value of your home after you buy it. A previous owner could have zoning violations……or the latest problem….identity theft.
Because we have written our real estate contracts to provide more protection for our buyers, an “Enhanced Title Policy” is part of every contract we write. Added coverage includes:
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Unrecorded easements
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Subdivision law violations of previous owner
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Forced removal of any structure that violates an existing zoning law
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Failure to obtain building permit by previous owner
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Discriminatory covenants
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Actual vehicular and pedestrian access based on legal right
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Adverse possession
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Forgery or impersonation
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Neighbor’s encroachment other than boundary wall or fence onto your property
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Defective Title
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Inflation coverage up to 150% of original policy
Please contact us with any questions about title insurance policies.
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