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 To understand title policy insurance
in America, let's look at chain-of-title and how title
companies search the public records. Title insurance
companies aren't really concerned with where dinosaurs
once roamed, whether our ancestors trekked across the
Bering Straight or where American Indian tribes settled.
Title searches begin with when the United States
government stole the land, I mean claimed it -- from the
U. S. patent -- and move forward from that point.
Because humans are involved in recording deed transfers
and plotting land parcels, a lot can go wrong. You want
title insurance because it will protect you against
defects and human error. |
- Title searches start with the
most recent deed, searching the grantee's name (the
person now holding title) backwards in time, until
the deed when the grantee acquired the property is
located.
- That grantor's name is then
searched backwards in time in the grantee's book to
find when the grantor acquired title as a grantee.
- This process continues, and over
time, the property description involves larger and
larger parcels of land.
- Eventually, the searcher finds
the U. S. Patent
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Deeds establish chain-of-title, but
sometimes those chains are broken. In addition, title
searchers also look for reconveyances (proof that the
encumbrances are paid off), and they look for easements,
rights-of-way, CC&Rs, other elements affecting title to
the property. Here are more records that are searched to
piece title together.
- Marriage records
- Death certificates
- Tax sales
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| Consumers can choose among a variety
of options, but the top three choices are Owners,
Lender's and Extended Coverage. |
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Basic Owner's Title Policy Coverage:
- Clear title to the property
- Incorrect signatures on
documents
- Forgery, fraud
- Defective recordation
- Restrictive covenants
- Encumbrances or judgments
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Basic Lender's Title Policy Coverage:
- Mechanic's liens and
unrecorded liens
- Unrecorded easements and
access rights
- Defects and other unrecorded
documents
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Extended Owner's Coverage:
- Building permit violations from previous
owners
- Building permit violations from previous own
- Covenant violations from previous owners
- Living trusts
- Structure damage from mineral extractions
- Variety of encroachments and forgeries after
title insurance is issued
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| How Long Are Title Policies Good
For? Forever, theoretically.
If you are planning to resell the property within a
couple years, ask your title company about "binder"
coverage. Most companies will sell you a binder policy
for 10% more. A binder is good for two years, often can
be extended beyond that time, and the fee charged for
the new buyer's policy will be the difference between
what you bought the property for and the price at which
it sold. In other words, you will get a credit for the
amount of coverage you purchased under your own Owner's
Title Policy. |
| How Often Are Title Policy
Insurance Premiums Paid? Once.
The fee is due when you buy. You will never pay it
again. Title policy insurance is the best insurance
policy you can ever buy. |
