What is Title Insurance?

Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property. Each title insurance policy is subject to specific terms, conditions and exclusions.

How does title insurance differ from other insurance?

Insurance such as car, life, health, etc. protects against potential future events and is paid for with monthly or annual premiums. A title policy insures against events that occurred in the past of the real property and the people who owned it, for a one-time premium paid at the close of the escrow.

What does title insurance cover?

Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the actual policy.

Who needs title insurance?

Purchasers and lenders need title insurance in order to be insured against various possible title defects. The buyer, seller and lender all benefit from the issuance of title insurance.

How is a title policy created?

After the escrow officer or lender opens the title order, we begin a title search. A Preliminary Report is issued to the customer for review and approval. All closing documents are recorded upon escrow's instruction. When recording has been confirmed, demands are paid, funds are disbursed, and the actual title policy is created.

What is escrow?

Escrow refers to the process in which the funds of a transaction (such as the sale of a house) are held by a third party, often the title company or an attorney in the case of real estate, pending the fulfillment of the transaction.

What are the policy types?

A standard policy insures the new owner/homebuyer, and a lender's policy insures the priority of the lender's security interest.

Why title insurance?

Other types of insurance coverage focus on possible future events and charge an annual premium - such as flood insurance or hazard insurance that safeguard against loss from wind damage. Title insurance protects against loss from hazards and defects already existing in the title and is purchased with a one-time premium. A title search and examination is the first step. Insuring a home's title begins with a search of public land records affecting the property. The title agent or attorney working on behalf of the underwriter examines pertinent documents to determine whether the property is insurable. Those documents include deeds, wills, trusts, outstanding mortgages and judgments, property liens, highway or utility line easements, pending legal actions and notary acknowledgements. When title problems are disclosed during the search process, they are corrected whenever possible to avoid future claims. According to surveys done by the American Land Title Association (ALTA), title problems consistently arise in one out of three real estate transactions (36%). A corrective process is vital to curing title problems. The process of performing title searches and curing title problems does not come cheap. Industry studies find that title insurers spend an average of 92 cents out of every premium dollar as their cost of doing business. The most common actions to cure title defects include:

• Releases/pay-offs for liens - 33%
• Releases/pay-offs for deeds/mortgages - 19%
• Typographical corrections (names, addresses, legal descriptions) - 17%
• Clearing estate/family issue - 11%
• Clearing physical property issues - 7%

What if a problem is hidden or missed? After all this searching and examination, a title problem may still be hidden or missed, such as:

• A forged signature on a deed
• An unknown heir who steps forward to claim ownership of the property
• An expired or forged power of attorney used during a property transfer
• An incorrect public record

In each of these cases and many more, when there is appropriate title insurance coverage, a policy will offer financial protection. The title insurer defends the title and either perfects the title or pays valid claims.

What is dower?

Dower is an ancient rule of law which provides that if you are married, your spouse has an interest in property that you own (generally equal to a 1/3 interest). Ohio is one of the few states that still recognizes the right of dower. Practically speaking, if you are selling property that is titled in your name only but you are married, your spouse will have to sign the conveyance instrument to release his/her dower interest in the property. Dower can also apply if you are buying property. For example, if husband and wife are purchasing property but only want the property and loan to be in husband's name; the wife will have to release her dower interest in the mortgage instrument.

Do Title Insurance Rates vary?

In the State of Ohio, title insurance rates are state-mandated, which means they do not vary from title company to title company. This is different from car insurance or homeowners insurance where you can shop around to find the best rate. If you are purchasing a house and want to buy an owner's policy of title insurance as part of the closing, the cost will be approximately $575.00. This is true regardless of where you close. The costs that do vary, however, are closing costs. Not all title insurance companies charge the same closing/escrow fee, title examination fee, search fee, etc. So, while you can't shop around for the best title insurance rate, it is possible to shop around for the best deal on overall closing costs. To see an estimate of what your closing costs would be if you close with us, e-mail us at info@cretitle.com and ask for a preliminary closing statement.

What is a Reissue Rate?

If you are selling your home and you have an owner's policy of title insurance that is less than 10 years old (or if you are refinancing and you have a loan policy of title insurance that is less than 10 years old), you may qualify for a reissue rate. A reissue credit can save you up to 30% off of the cost for the new title insurance policy. If you can provide us with a copy of your prior policy, you may save additional money on the title examination fee because we can "update" the title from the date of your policy rather than performing a full 60-year search. Call or e-mail us today to see if you qualify.