Why is Title Insurance Important to Homeowners?
With auto insurance, you protect yourself against experiencing financial ruin if you are involved in an automobile accident. With life insurance, you protect your family against being left penniless in the event of your untimely death. In addition, with homeowners insurance, you protect yourself and your family against having to shoulder the full cost of rebuilding if your home and possessions are destroyed by fire or by another catastrophe.

BUT are you protected if you lose, through no fault of your own, ownership of your single largest financial asset? Research shows that your home is probably the single largest asset you will acquire during your lifetime. Suppose you were to find out that the person who sold you your home did not own it. Are you protected from a claim against the ownership of YOUR very own home?

This is where title insurance comes in. When you buy an owner's title insurance policy, you are protecting yourself and your family against claims to the title (ownership) of your home. Your home will be there for you and your family - a place to live, and a guaranteed investment for your retirement and future.

What is Title Insurance?
Suppose you receive a letter or a knock on your door, and someone tells you that the deed to your home is a forgery. Or suppose you receive a letter from the local taxing authority informing you that they are about to auction off your home, because the prior owners failed to pay their real estate taxes. What if you find that your neighbor's fence or garage is actually built on your property, or vice-versa?

Title insurance protects you against having to make expenditures on your own if any of these or similar events occur, providing that your policy contains no exceptions or exclusions for the event. A policy of title insurance insures that you actually own your home, and you are not subject to the interests of other persons (other than those persons and matters disclosed and excepted or excluded from coverage in the policy). If the information upon which the title insurance is based is incorrect, and a claim is asserted against your ownership of the home, then the policy indemnifies or protects you from experiencing a financial loss directly attributable to the covered claim.

How does this Work or What is the Process?
Before you close or settle upon the purchase of your home, your lawyer, real estate agent, or lender will ask a title company to examine or search the title to your soon-to-be-acquired house, as well as the land on which it sits. The law refers to the house and the land together as real property. The searcher or examiner looks at the public records in the local courthouse, as well as in the various municipal and local governmental offices having jurisdiction over the real property to determine the status of the property's title. This search or examination will uncover any judgments, mortgages, taxes, assessments, charges, or other liens which may encumber or adversely affect the property's title. In particular, a historical search or examination will be made of the prior owners of the property. This will determine whether they had "good" title to the property, or whether they did anything during their ownership of the real property to encumber or adversely affect the property's title.

Once the examiner or searcher has completed this process, the title company will compile the information and prepare a Certificate or Commitment that reports on the status of title. The Certificate or Commitment will list as exceptions or exclusions to title all encumbrances, liens, or other adverse matters that were found. This process is completed before you purchase the property. If these matters are not cleared up or resolved by the end of the closing or settlement, the matters will be excepted from the coverage provided by the title policy, and the policy will not cover any loss caused by or arising from the excepted matters.

Unless the title company takes a specific exception in the title policy, the policy will protect you from having a financial loss because of, or arising from matters such as someone else owning your home, a forgery or fraud in the prior title, lack of legal access to the property, or the existence of undisclosed liens such as taxes, mortgages, assessments or charges, as well as many other matters which affect the ownership of the property.

If someone makes a claim, United General Title protects you by defending your interest in any court case and paying the costs, attorney fees and expenses incurred in that defense. If the court finds the claim valid, United General will pay the cost of your claim up to the amount of the policy or will undertake, at its own expense, the responsibility of correcting the problem.

Unlike all other forms of insurance, for this substantial protection you pay only ONE PREMIUM at the time of closing or settlement! In addition, if you purchase an owner's and mortgage policy at the same time, depending upon your state's laws, you may be entitled to a substantial discount in the cost.

But Doesn't the Bank's Policy Cover Me?

The short answer is "No."

There are two kinds of title insurance policies: the fee or owner's policy and the mortgagee or lender's policy. If a claim arises from a covered loss, the bank or lender will be paid in accordance with the terms of the mortgagee or lender's insurance policy. However, just as a life insurance policy on someone else's life does not provide any coverage to your family, the bank's title insurance policy will not protect you if there is a loss.

For example, if your deed turns out to be a forgery, the mortgage policy will cover the bank and pay off your mortgage. But unless you have purchased a fee or owner's title policy, you will not be paid anything for the loss of your home, your largest financial asset. It's up to you not to let that happen. For a single, one-time premium, you are covered for as long as you own your property.

And now, for some legalisms...
A title insurance policy is a legal contract, the terms and applications of which are governed by the laws of the state in which you reside. Therefore, in the unlikely event of a conflict between the statements made in this web page and the terms and conditions of the actual policy, the actual policy will govern. You may wish to consult with an attorney concerning title insurance, as well as all phases of any real estate transaction in which you may enter.