You may be looking for ways to protect your investment if you’ve just purchased a home. title coverage is a great way to do this. This type of indemnity policy protects both homebuyers as well as lenders from losses resulting from “defects” or issues in the title to a property.
Title insurance is only paid once, unlike other insurances that are paid on a monthly, semi-annual, or annual basis. Title insurance comes in two forms: a owner’s and a lenders’ policy . It’s important to understand what a standard title insurance policy covers before discussing what it doesn’t.
What does title insurance cover?
Standard Owner’s Title Insurance Policy covers:
• Other parties may claim ownership, including unreported heirs.
• Public records that are inaccurate or incomplete (such as a mistake in the owner’s name on the title, or an incomplete description of the property).
• Forgery and fraud include false signatures on documents
• Outstanding liens (e.g. Liens (Mechanics) and lawsuits
• Encumbrances or judgments
• Unrecorded restrictions and easements that lower the value of a property
Some extended policies include coverage for claims relating to encroachments or previous homeowners who did not have building permits. Even after a realty company has conducted a title check, a homeowner may still suffer financial losses. The state determines who is responsible for paying title insurance, the buyer or the seller.
What does title insurance not cover?
Title insurance can be beneficial, but it does not cover everything that could happen to your property. Title insurance does not cover the following:
Title insurance does not cover incidents that worsen the condition of the property after the closing date. This can include an infestation of pests such as termites. This type of insurance would require a homeowner’s policy.
The presence of mold or mildew
A title insurance policy will not cover you if mold or mildew begins to grow on your property. However, a homeowner’s policy will protect you from this.
Fire and weather damage
Title insurance policies do not cover weather and fire-related damage. Fire and weather-related incidents (e.g. Storms do not affect a house’s title. This is the document that proves legal ownership. Fire and storm coverage can be included or optional in a homeowner’s policy, depending on where you live and your insurer.
Repairs not caused by the previous homeowner
Title insurance policies will not cover repairs made to your home to repair issues like leaking roofs and cracks in the foundation wall (which can lead to water or debris getting into your property). These aren’t attributable to previous owners’ work.
Title insurance policies will not cover items like underground tanks. The reason for this is that a title company could not have known of the item’s existence unless it was specifically stated in the title. However, the company failed to include the information on the title commitment. This is the business’s promise and assurance to provide title insurance upon closing. A commitment usually lists the same conditions and terms that are outlined in the title insurance policy. It’s important to read this document carefully.
Talk To The Title Insurance Experts
Contact Cities Title Services for more information on what title insurance covers and does not cover. We provide legal advice and real estate settlement services to lenders, homeowners and sellers throughout Northern Virginia. Robin Mathis, an attorney with over a decade of experience in real estate closings and a wealth of knowledge about the buyer’s and seller’s side of transactions, is a highly qualified expert.
We will hold the funds in escrow prior to closing and title transfer. We can start a search for a clean title once the order has been approved. A title insurance policy will then be issued. We offer basic and extended policies and work with several reputable underwriting companies.