Title Insurance FAQs

Title insurance is a process, with the insurance policy being the end product. The process starts with a comprehensive search of public records to determine if any liens or other encumbrances are attached to the title. During the search, detailed information from potentially hundreds of sources is gathered and reviewed — including tax records, federal, state and local records, court judgments, deeds, and an evaluation of whether the property characteristics are accurately reflected by the information on the title. Not surprisingly, one in four title searches uncovers a problem that must be rectified prior to close.

There are four primary categories that can cloud a title and result in significant risk for a prospective home buyer. The title search meticulously seeks out and evaluates any known indication of these issues. However, even the most comprehensive search may not uncover every hidden area of title risk. Buyers should make sure all issues that come to light from the title search are adequately resolved prior to closing.

Once the title search has been concluded and curative work to resolve any issues has been completed, title insurance can then be issued. The title insurance policy protects policy owners against covered financial losses associated with claims against the title that were not discovered during the title search process. It also insures against the title being rejected by a subsequent buyer due to preexisting title defects and covers losses that may arise after the property is sold if title covenants were included in the sales contract.

There are two different kinds of title insurance policies. Lender's (or Loan) Title policies are required by lenders and paid for by the borrower at closing — but these policies only protect the lending institution. Owner's Title policies protect the homebuyer's investment and are usually good for as long as the buyer or their heirs own the property.

Many states set the rates for title insurance, and home buyers should always feel free to shop policy coverage and rates before making their final choice. Unlike other types of insurance that require ongoing payments, title insurance covers things that happened in the past — prior to closing — that could affect the status of the property's title. There is a one-time cost at closing, and the policy is good for as long as home buyers or their heirs own the property.

Team Goeglein at Fidelity National Title walks every buyer and agent through the title insurance process — from the initial search to the final policy — ensuring complete understanding and confidence at every step.