Standard Title Insurance
A policy that insures a home buyer and/or mortgagee against errors in the title search.
Title insurance in the United States is insurance against financial loss from defects in title to real property and from the invalidity or unenforceablility of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of the comparative deficiency of the US land records laws. It is meant to protect an owner’s or lender’s financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. (Source, Wikipedia)
Enhanced Title Insurance
The extra insurance provided by an enhanced policy covers risks such as: claims arising out of fraud, easements, if your forced to remove an existing violation of any covenants, an existing violation of a regulation or law affecting the land, you are forced to move any structures because they encroach on others land, your structures are damaged because of the exercise of a right to maintain or use any easement affecting the land, or your neighbor builds any structures after the policy date which encroach on your land. Perhaps the two most frequent claims are when a neighbor builds a structure encroaching your land or when your land is damaged by someone else using their easement. Enhanced policies cost a little bit more than the standard policies, but the piece of mind it provides is well worth it.
For more information on enhanced title insurance benefits, click here.
* Enhanced Title Insurance is a 10% surcharge over standard title insurance rates
A title search is a process that is performed to determine the answers to two questions.
Does the seller have a saleable interest in the property?
Do any liens exist on the property which need to be paid off at closing (mortgages, back taxes, mechanic’s liens, or other assessments)?
A title report also shows any easements, or recorded legal rights to the property or portions of the property. For example, a previous owner may have legally given a neighbor the right to share the driveway, or the city may have a right to strips of the property for putting power lines, communication lines, water pipes, or sewer pipes.
In the United States, the buyer of a property will usually purchase title insurance, which protects the buyer from any title problems that may arise after sale (such as liens that were missed during the search). The title insurance company issues a report and issues an insurance policy in support of its findings.
A title search is also performed when an owner of a certain real property wishes to mortgage his property and the bank requires him to insure their transaction.
Generally, there are two main types of title searching, a full coverage search and limited coverage search; other types include non-insured reports and foreclosure guarantee search.