Title Insurance is an insurance policy that protects the insured against loss should the condition of the title to the land be other than as insured.

A Lender's Policy insures that the lender has an enforcable mortgage lien and that it is secured in the proper position of collection priority. In other words, that there are either no other liens ahead of them or, if there are, they are aware of them and accept them as a part of their loan product (i.e. a second deed or trust or a home equity loan).

An Owner's Policy insures that the owner has the legal and insured right to title without interference from parties claiming a right to that property. This may be from a lost or missing heir of any prior owner or any person who may have held and ownership interest in the property and failed to convery that interest to successive owners.

When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title Insurance is designed to cover these rights.

The cost of title insurance varies from state to state, the rates are determined by each individual state. The amount fo the premium that would be charged in each transaction depends on the value of the property in a sale transaction or the amount of the loan in a refinance transaction. Once you purchase an owner's title insurance policy, you are covered for as long as you own your property and you need not ever purchase another owner's policy. Each time you refinance your property your lender will require you to purchase a new lender's policy. If you obtained an owner's policy during your purchase transaction, you may be eligible for a discount, or "reissue rate," on the new lender's policy.

Not at all. At the mere hint of a claim adverse to your title, you should contact your title insurer of the agent who issued your policy. Title insurance includes coverage for legal expenses, which may be necessary to investigate, litigate or settle an adverse claim.

The lender's policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender's ability to foreclose and recover its principle and interest. And, in the event of a claim there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner's policy is a bargain.

Standard Coverage addresses such risks as:

• Forgery and impersonation
• Lack of competency, capacity or legal authority od a party
• Deed not joined in by a necessary party (co-owner, Lien, spouse, corporate officer, or business partner)
• Undisclosed (but recorded) prior mortgage or lien
• Undisclosed (but recorded) easement or use restriction
• Erroneous or inadequate legal descriptions
• Lack of a right of access
• Deed not properly recorded

Extended coverage is also available. Such a policy covers all the risks listed above plus:

• Off-record matter, such as claims for adverse possession or prescriptive easement
• Deed to land with building encroaching on land of another incorrect survey
• Silent (off-record) liens, such as mechanic's or estate tax liens
• Pre-existing violations of subdivision laws, zoning ordinances or CC&R's (Covenants, Conditions & Restrictions)
• Post-policy forgery.
• Forced removal of improvements by a neighbor onto insured land
• Post-policy construction of improvements by a neighbor onto insured land
• Location and dimensions of insured land (survey not required)