There are two different kinds of title insurance policies: lender’s and owner’s. Almost every lender in a consumer transaction will require that the purchaser buy a lender’s title insurance policy to protect the lender against title defects from the past. But lenders do not require that purchasers buy title insurance to protect their own interest in the property.

Over the years, we have seen hundreds if not thousands of title defects. We firmly believe that purchasing property without an owner’s title insurance policy is a foolish decision. 

So why do you need title insurance for yourself if a title examination has been conducted? The title examination is performed for the benefit of the mortgage company and it only protects the lender against defects (mortgages, liens, delinquent tax bills, etc) that are actually discovered in the exam. There are many potential defects in a title which might not actually appear in the exam, or which might be missed in the exam.

The owner’s title insurance policy will cover legal fees as well as your equity in the property, up to the policy limits (which is usually your purchase price) for covered defects that occurred prior to your ownership of the property but which are discovered after you buy the house.

These are but a few of the many potential title defects that might affect the property you are purchasing, and without an owner’s title insurance policy, you won’t be protected against:

 

• Forged deeds, mortgages, releases of mortgages and other instruments.

• False impersonation of the true owner of the land.

• Deeds executed under fabricated or expired power of attorney.

• Deeds apparently valid but actually delivered after death of the grantor or grantee, or without consent of grantor.

• Deeds by persons of unsound mind.

• Deeds by minors.

• Descriptions of properties apparently but not actually adequate.

• Duress in execution of deed.

• Defective notary acknowledgments.

• Deeds by persons apparently single but actually married.

• Undisclosed divorce of spouse who conveys as sole owner.

• Undisclosed heirs.

• Misinterpretation of wills, deeds and other instruments.

• Birth or adoption of children after date of will.

• Children living at date of will but not mentioned therein.

• Discovery of will of someone thought to have died without a will.

• Discovery of later will after probate of first will.

• Administration of estates and probates of wills of person who murdered the decedent.

• Deeds to or from corporations before incorporated or after surrender of forfeiture of charter.

• Undisclosed mechanics liens.

• Mistakes in recording legal documents. (i.e. incorrect indexing, errors and omissions in transcribing and failure to preserve original instruments.)

• Failure to include necessary parties in judicial proceedings.

• Errors in tax record. (i.e. listing payment against wrong property)

• Erroneous reports furnished by tax officials, but not binding on municipality.

• Lack of capacity of foreign personal representatives and trustees to act.

• Deeds from nonexistent entities.

• Deeds in lieu of foreclosure set aside as being given under duress.

Feel free to contact any of our attorneys if you would like to discuss title insurance in more details