What is Title Insurance?

As real estate is the nation’s largest market, its purchase and sale is essential to the health of the U.S. economy. However, these transactions are never without risk. That’s why title insurance has been protecting American homeowners for more than 130 years.

Overview

When a piece of real property is financed, purchased or sold, a record of that transaction is generally filed in public archives. Likewise, other events that may affect the ownership of a property are also documented and filed. These may include liens, levies, encumbrances, etc. When a buyer purchases title insurance, the title company searches these records to find (and remedy, if possible) issues that may affect the purchaser’s ownership.

Title Search and Exam

That’s where title insurance differs from traditional insurance models. When you purchase a policy insuring you for matters relating to your car or health, the insurance company assesses the risk of insuring you, and bases its premium on the risk being assumed. With title insurance, the insurer first works to identify the status of ownership, liens and other matters affecting title by collecting documents affecting title from the public records that are statutorily identified for the recording of real estate transactions. This process is called the search. Once the search is complete, the title insurance underwriter can then determine the insurability of the title and list exceptions from coverage and requirements to insure.

Undiscovered Risks

Of course, even the most skilled title professionals may not find all title problems. Other risks include matters that are more difficult to identify, such as title issues resulting from filing errors, forgeries, undisclosed heirs, and other unforeseen problems. That’s one reason why your title insurance policy can play a key role in protecting your real estate investment.

Loan Policy

The purchase of a home or other real estate may be the largest financial investment you ever make. Title insurance can give you added peace of mind in knowing that the title to your investment is insured.

When you purchase a new home or other piece of real property by securing a mortgage, you will be required by your lender to purchase a loan policy of title insurance. This policy insures the lender against covered title defects up to the amount of insurance. This coverage in favor of the lender lasts for the life of the loan under limited circumstances stated within the policy.

Owner’s Policy

You will also have the option of purchasing an owner’s policy of title insurance, which provides insurance directly to the insured owner listed in the policy, and describes the type of real property interest owned. The insurance in both an owner’s and a loan policy is subject to the policy provisions, which include the covered risks, exclusions from coverage, the conditions and the exceptions to title listed on a schedule to the policy.

Premium

You will pay a one-time premium for both the loan policy and the owner’s policy at the close of your transaction, based on the total value of your home and the amount of your loan. This is another way in which title insurance differs from other insurance models, where premiums are paid on an ongoing basis. The purchase of a home or other real estate may be the largest financial investment you ever make. Title insurance can give you added peace of mind in knowing that the title to your investment is insured.

Every day, across the nation, agents of First American Title Insurance Company (“First American”) are clearing title issues, issuing title insurance policies and delivering title information with timeliness, accuracy, expertise and integrity – attributes that continue to make a difference in the lives of your valued customers. Whether they are buying, selling or refinancing their homes, insuring their transaction through an agent of a trusted, reliable and recommended industry leader gives them the protection they need and the peace of mind they deserve.

Trusted

Tracing its beginnings to 1889, First American was built on a foundation of integrity and service that has helped it grow into one of the largest title insurance underwriters in the nation. As an agent of First American, we are proud to have an underwriter who has earned a reputation for diligence, thoroughness and personal and professional service. First American is committed to providing quality information backed by a guarantee of integrity and a confidence that the Company would be there to stand behind its word. This commitment gives customers confidence and security as they look forward to completing their transactions and receiving their title insurance policies.

Reliable

Backed by First American Financial Corporation, your customers can rest assured that First American has the financial strength to be entrusted with insuring the title of their real estate transactions. A First American Owner’s Title Policy provides protection in the event rights of ownership are challenged or a fl aw in the title is discovered. Despite a thorough search of public records by knowledgeable and experienced professionals, title problems can occur. You and your customers can rely on First American to have the financial strength to stand behind their promise of protection.

Recommended

We are service-oriented individuals who live and work in the communities we serve and we adhere to a level of excellence that is unparalleled in the industry. Customer loyalty and repeat business are a direct result of our continued efforts to improve the quality of service we deliver and the value we provide to our customers.

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Effective: October 1, 2015
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