Title Insurance
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What is a title insurance policy? A title insurance policy is an agreement between the insured party and the insurance company. The insurance company agrees to protect the interest of the insured party in the real estate. What are the types of policies? Owner’s Policy – this protects the party that is purchasing the real estate. Loan Policy – this protects the Lender’s interest. How much does it cost? Owner’s Policy – the fee is based upon our published rate card on this website. Loan Policy – the fee is based upon our published rate card on this website. (Each policy is individual; however, if they are purchased together the Loan Policy is substantially discounted) Who pays for the policies? Owner’s Policy – this is negotiable. In most of Indiana, it is customary for the Seller to pay for an Owner’s Policy for the purchaser; however, the purchase agreement will clarify who is responsible for payment of this fee. Loan Policy – the purchaser (or owner on a refinance) is responsible for payment of this fee. How often do I have to pay this premium? Owner’s Policy – is paid in full with a one-time fee which is part of the closing costs. Loan Policy – is paid in full with a one-time fee per mortgage placed against the property and is part of the closing costs. (Therefore if you refinance you will be required to provide a Loan Policy to your new Lender) What does the policy cover? The following are just some of the risks covered by title insurance: a. Forgeries in the chain of title. b. Altered instruments. c. Recorded instrument which were not delivered. d. Instruments obtained by fraud or duress. e. Instruments executed to defraud creditors. f. The incompetency of parties to the instrument. g. Errors by searchers or examiners. What isn’t covered by the policy? The policy does not cover defects that occur after the date you purchase the property. (It is important to note that it does cover defects that occurred before the date you purchase the property but come to light after the date you purchase the property) The policy does not cover any problems that occur which are directly caused by your actions. Is the purchase of a policy mandatory? Owner’s policy – No. It is certainly recommended and is what protects the owners of the property. It is especially important on purchase or new construction transactions. Loan policy – Yes. Lenders require that their interest in your real estate is protected by a policy. What is The TIEFF fee? This is the Title Insurance Enforcement Fund Fee. This fee is paid to the Indiana Department of Insurance and is used to police the title industry. Title Insurance is a relatively inexpensive item and can be one of the best purchases you’ll make for your new home. You’ll sleep a little better knowing that you are protected if a long-lost heir of the former owner shows up on your doorstep. |
