Title insurance is a policy that is issued by a Title Company insuring against any defects in the title. Unless the title is insured, homeowners/lenders cannot be sure that they will not suffer a loss through title disputes after buying or lending on real estate. If the title is ever defeated, title insurance reimburses owners/lenders for the amount of their loss up to the face value of the policy.
Each title insurance policy that Authorized Title & Escrow issues is paid, in full, by the first premium for as long as the insured and/or heirs own the property.
The seller or borrower (when refinancing), pays for the cost of the title insurance, this fee is based on the sales/borrowed amount. The buyer is named as the insured in a sale, with the lender being named as insured when refinancing.
When an order is placed with Authorized Title & Escrow, a title search is performed in order to determine if there are any liens or encumbrances showing of record affecting the property. A preliminary title report also shows easements and rights of way of record that pertain to the property. A copy of the report is then provided to all interested parties. This report is the base that we use when issuing title insurance.
Title insurance protects the buyer/lender from suffering loss due to the following:
Documents executed under false, revoked or expired powers of attorney
False impersonations of the true landowner
Undisclosed heirs
Improperly recorded legal documents
Prescriptive rights (acquired through adverse possession), not appearing of record and not disclosed by a survey
Defective acknowledgments due to improper or expired notarization
Corporate franchise taxes as liens on corporate real estate assets
Gaps in the chain of title
Mistakes and omissions resulting in improper abstracting (chain of title)
Forged deeds, mortgages, wills, releases of mortgages and other instruments
Deeds by minors
Inadequate legal descriptions
Errors in tax records
For any other questions, please feel free to contact any of our qualified representatives.
