Anthony C. Caracausa, Real Estate Broker

Title Insurance is an insurance policy that insures the past. It insures that the person/entity selling you a property is the rightful owner and that all mortgages, judgments and assessments against that owner and/or that property are properly disclosed and disposed of prior to your money being sent for that property.

At the time of the signing of the Agreement of Sale, the buyer has the choice to determine which company that they would like to insure their purchase. After that choice, the property search is ordered and the process begins. The subject property is searched in the County seat where the property is located. In Philadelphia, that would be City Hall; in Montgomery County, PA that would be in Norristown. The searcher accesses the records for that property for at least the last 60 years. All Deeds, Mortgages, Assignments of Mortgages, etc are assembled with related documents such as tax records, water/sewer records, etc and that information, the title brief, is forwarded to the title examiner.

The title examiner reviews the brief and indicates those items that are important to the transaction about to be insured. Those items are then assembled and a title commitment is issued. This title commitment acts as a manual of how the settlement should transpire; that is, those items that must be addressed and information obtained so that at the time of settlement, those conditions or requirements can be cleared. The smoothness of the settlement depends on close interaction with the buyers and sellers’ real estate agents and their attorneys, lenders and various other municipal providers. Prior to settlement, you should be aware of the title company’s expectations of you and for you; and as required by RESPA, you are entitled to a completed HUD 1 Settlement Sheet 24 hours prior to settlement.

At the time of settlement, you will be confident and prepared if your title company has received all of this cooperation from all of the interested parties. Title companies, as well as the title agent, are licensed through the state where they operate and write insurance. All title companies have national underwriters to insure that they are operating effectively for their clients. In addition, each state provides guidelines for title company operations and all fees for title services are standardized and regulated by the Department of Insurance in each state where the title company operates.

Title Insurance-What is it?

Of all the insurance products available to the consumer today title insurance may be one of the most unique and certainly one of the most necessary to property owners. Regardless of its necessity it remains widely misunderstood by most consumers. This guide is designed to answer some of the more common questions about title insurance.

What does Title Insurance do?

Basically, it protects the insured from losses as the result of claims on one's ownership of land. For instance, a seller may forge a signature of another, creating a loss for a new owner. Other problems that can occur include:

What else do I get?

Probably one of the most comforting features of Title Insurance is the obligation of the insurer to defend you against claims of others. A neighbor may claim rights to a portion of your land. Without Title Insurance you would have to bear the cost of settling this dispute through the courts, regardless of the validity of the claim.

Are there different types of Title Insurance policies?

There are two basic forms of Title Insurance--an Owner's Policy and a Loan Policy. As the names indicate, the Owner's Policy covers the land owner and the Loan Policy covers the lender on a particular parcel of real estate.

If a loan policy is issued, why do I need an Owner's Policy?

A Loan Policy offers no protection to the land owner. A claim may arise that does not jeopardize the lender's interest, but may, in fact, cause a great loss to the owner. An example would be the one outlined earlier, when a neighbor claims rights in your land.

How long am I protected?

In a word...forever. You and your heirs are protected for as long as you or your heirs own the property.

How much does it cost?

Fees vary from state-to-state, but in all cases it is a one time cost that doesn't have to be renewed like other forms of insurance.

How long has Title Insurance been around?

The first Title Insurance Policy was issued in 1878 in Philadelphia, Pennsylvania.