Ownership: The Whole Story
Also: Title Insurance-Plain and Simple
Also: Closings: A Home-Buyers Seminar
Also: Guide to Title Insurance Fees and Costs
Life and Liberty are secure only so long as the right to property
is secure. This is one of the principles adopted by the founders
of our country and writers of our U.S. Constitution.
How Do You Know the Land You Bought is Really Yours?
Buying real estate is unquestionably an important investment,
usually the largest investment the average person makes
during his or her lifetime. The soundness of that investment
largely depends on the condition of the title to the land,
because what you buy is not land, but the title to it.
Land is both permanent and immovable. No other property
has such a useful life associated with it. Owners eventually
die, and new ones take over; the title itself can be sold,
exchanged, borrowed upon, given away-but the land itself
goes on indefinitely. Its appearance may change, but its
Because of these factors, a completely different set of
laws and procedures govern real estate. These laws and practices
are so numerous and complicated that it's impossible to
be certain that the title has no defects which would impair
your right to the use of the land.
For example, there are many possible defects in titles that
could be so well hidden that even the most painstaking examination
of the records cannot discover them: defects arising from
fraud, forgery, insufficiency of deeds or other documents,
persons of unsound mind, missing heirs, widow's dower, rights
of divorced persons, or a child born after the making of
a will-these and multiple other circumstances can arise
to impair the title to your property and your investment
Financial institutions that lend money on real estate as
security recognize these kinds of risks. They can't afford
to assume the risks, and thus require a title insurance
policy for their protection.
But note that it is only for their protection! The mortgagee's
(lender's) policy issued on your property will not protect
1. The title company's duty is to protect only the mortgagee
or lending institution, because the lender is the insured,
not the property owner.
2. The title insurance policy is issued only in the amount
of the mortgage; as you make payments and reduce the amount
of the mortgage, the insurance provided by the mortgagee
policy is reduced accordingly.
You should protect yourself at the time you buy real estate
by requesting an owner's policy for the full purchase price,
naming you as the insured. There is a premium rate discount
offered if you buy an owner's policy at the same time the
mortgagee policy is issued. There is no recurring premium
to pay for title insurance; you pay only the initial premium
for the policy-and the coverage continues indefinitely,
even extending to your heirs for as long as they have any
interest in the property.
An owner's title insurance policy will assure that you:
1. Are protected against financial loss that you may
suffer because of concealed title defects that cannot
possibly be discovered by title examiners.
2. Are protected against human errors of title examiners
and others that may cause you financial loss.
3. Are protected by the knowledge, skill, and expertise
of title insurance professionals who base their decisions
on an exhaustive search of your title and whose broad
objective is to eliminate guesswork and the probability
4. Have a written guarantee that the title insurance company
will undertake, at its own expense, to defend your title
in all legal actions or proceedings alleging the title
to be other than as insured.
5. Have a definite insurance contract indemnifying you,
according to its terms, against loss or damage due to
title defects and backed by the known assets and reserves
of the title insurance company.
6. Will have no recurring premium to pay for title insurance.
Remember, you pay only the one premium for the policy-and
the coverage continues indefinitely, extending even to
your heirs for as long as they have any interest in the
For your peace of mind, don't settle for less than full
protection. Make certain you, too, are protected with an
owner's title insurance policy from a reputable carrier.
Return to the Title Insurance Guide