Types of Title Insurance and Do I Need Title Insurance?
Lenders’ title insurance for the protection of your lender’s interest in the property.
Lenders require the Borrowers to pay for lender coverage as a condition of obtaining a loan.
Owner’s title insurance for your protection against any unclear or undetected title defect on the property such prior liens, judgments and/or claims arising from previous ownership.
Homeowner’s Title Insurance for expanded protection for items covered by a typical Owner’s Policy and for matters first occurring after your closing, such as:
Post-policy forgery or impersonation leaving you with no record title or with mortgages on your home you never made.
Someone claiming that during your ownership a prescriptive negative easement, such as a view easement, has been created over your land, limiting your use.
Neighbors building encroaching structures onto your land after you purchase it.
Anybody after you purchase your home recording a deed, mortgage, or other document that by mistake describes your property instead of the land intended, thereby leaving you with a clouded title and expenses and a hassle to get it corrected.
Lack of actual physical access for both vehicles and pedestrians to and from your home. (Other policies only provide coverage for lack of a legal right of access.)
Pre-existing violations of CC&Rs (Covenants, Conditions and Restrictions) which someone is trying to force you to correct or remove. This coverage applies even if the CC&Rs are excepted from coverage in schedule B.
Subdivision law violations of previous owner. (In some areas the title is void if the subdivision laws have been violated. In others you cannot obtain building permits to make the desired improvements.) h.Building permit violations of previous owners. (This is very valuable to the unwary purchaser because it is virtually impossible to know whether all portions of the home you want to purchase were constructed with a building permit.) i.Zoning law or regulation violations of previous owners which the insured is forced to remedy or remove.
Encroachments of existing structures onto neighboring property or onto easements affecting your home. (There is even coverage for boundary wall or fence encroachments.)
The residence with the address shown in the policy not being located on the land described.
Please note some of these coverages have deductibles and caps that may be less than the stated amount of the policy.
For peace of mind, a title policy is an essential. The cost of the owner’s title insurance premium is modest in comparison with the potential loss from a claim. Owner’s title insurance is a one-time premium and valid for the lifetime of ownership of the property.
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