Frequently Asked Questions: Title Insurance

When walking into a new place we have all of the questions. ALL OF THEM! We rounded up a few questions that we feel you might have about title insurance:

When should I get title insurance?

This is a great question, not a lot of people know this answer so we’ll shed a little light on it: You should obtain a title policy when you purchase a property.

Okay, but how do title premiums work?

Another fabulous question and it’s simple: The premium for a title policy is paid when it is issued, no further payments or financial upkeep are required. Plus, you’re covered indefinitely.

What is a “title exception”?

This is an encumbrance or restriction that prohibits use of the property for certain reasons. For example, you cannot use the property as a restaurant location, though you are the legal owner. Any and all exemptions will appear on the title policy. It is important to review and thoroughly understand all exceptions prior to obtaining title of a property. Anything listed as an exception is something the insured under the policy does not have title insurance to cover.

What is this “indefinite” time period, exactly?

The time period encompassed in this “indefinite” term is, simply, so long as you own the property. Anyone who purchases the property from you needs to obtain their own coverage. Your coverage does last even after you sell the property, a claim could arise based on items you sign in the sale of the property or due to liens that were undisclosed prior to the sale of the property, but you’re covered.

Does a lender’s title policy last “indefinitely” like mine?

Nope. It lasts until you pay off your mortgage and it is released, or if there is a foreclosure. In the case of a foreclosure, or if the loan is sold, the new lender is covered by the existing policy.