Owner’s title insurance is a vital consideration when purchasing real estate. It provides the buyer with protection against disputes, defects and claims to the property’s title.

Title disputes can occur for a variety of reasons – outstanding debt tied to the property, unknown heirs or conflicting wills, to name but a few. Title insurance will cover you for claims, losses and legal fees related to title defects that have arisen due to events that occurred before you bought the property. Please visit our ‘What Is Title Insurance?’ blog for further general information regarding title insurance. 

Lender’s vs. owner’s title insurance: what’s the difference?

You’ll probably have heard both of these terms being mentioned at some point during the buying process, but what do they mean? The clue is in the name – lender’s title insurance covers the mortgage lender, whereas owner’s title insurance covers the buyer. Both policies will generally offer a similar type of coverage against title dispute claims and losses; the difference between them is whom the policy protects. 

Is owner’s title insurance mandatory?

Whilst it’s not compulsory for buyers to take out owner’s title insurance, it is strongly recommended. Claims or title issues can crop up at any time, even after you’ve owned the property for several years, and without owner’s title insurance you’ll have no financial protection and will be responsible for rectifying these issues yourself. 

Lender’s insurance, on the other hand, is usually essential. The majority of lenders won’t grant a mortgage request without you taking out appropriate lender’s insurance. But remember – lender’s insurance won’t protect you!

How much is owner’s title insurance?

Owner’s title insurance is taken as a one-off payment at the closing stage, which then covers you for as long as you own the property. The cost of title insurance depends on various factors, such as the property price and the state that the property resides in, but it generally tends to be a small percentage of the price you’re paying for the property. For personalized calculations, please take advantage of our free rate calculator, which will give you a rough idea of the potential title insurance costs related specifically to your type of real estate purchase. And if you’d like further support regarding taking owner’s title insurance, please don’t hesitate to get in touch with Larry – a highly experienced and committed policy issuing agent specializing in title insurance in New York City.

 

Title insurance is an important policy that helps to protect one of your most valuable assets – real estate – from title defects. Title defects can occur from disputed ownership claims, outstanding liens and various other unexpected encumbrances, and without title insurance you’ll be responsible for settling these defects yourself, which can have catastrophic financial consequences.  

Title insurance therefore provides protection against claims, losses and legal fees if certain title defects should arise. It’s a type of indemnity insurance that works differently than many other types of insurance in that it covers future claims relating to events that occurred prior to the policy start date. It’s also paid as a one-time premium, rather than ongoing payments. 

Are there different types of title insurance?

Yes – there are two types of title insurance: lender’s insurance and owner’s insurance. As the name suggests, lender’s insurance protects the mortgage lender from losses that are a result of title defects. A lender’s title insurance policy doesn’t protect you, the buyer, but it is usually compulsory in order to have your mortgage request granted.  

To protect yourself from title defects, you’ll need to take out owner’s title insurance. This is separate from lender’s title insurance and is usually optional, but it is strongly recommended that you take a policy out; otherwise you run the risk of being financially liable for any title defects that may arise at any time in the future. It is also possible for the seller to purchase owner’s title insurance on your behalf.

What does title insurance cover?

Title insurance covers you and/or the lender (depending on the type of policies that you take out) against various title issues. Every policy will differ, but it usually includes:

• Outstanding liens (such as unpaid taxes or debt)
• Ownership disputes (unknown heir or conflicts relating to a will)
• Encumbrances (deed, public record and property survey issues, and fraud or forgery)

Title insurance only covers you for issues that arise from events that occurred before you purchased the property; it won’t cover eminent domain or issues that are a consequence of your own actions. You can find further information about title insurance coverage via our ‘What Does Title Insurance Cover?’ blog. 

How much does title insurance cost?

As mentioned above, title insurance is a one-time premium that’s usually paid during closing. The cost of title insurance varies between states and is usually influenced by the purchase or mortgage price. To give you an estimate of the potential cost, Langdon Title has created a useful rate calculator for the state of New York, which is completely free to use. 

How do you take out title insurance?

Through a policy agent such as Langdon Title! Langdon Title is a highly experienced policy issuing agent for commercial and residential title business, working with eight of the largest and highest rated title insurance underwriters. In order to provide title protection, Langdon Title will undertake an extensive search and examination of public records to identify any defects that are tied to the real estate in question. Any defects will then be resolved before the title policy is issued, or they will be excepted from the coverage. 

For more information and guidance regarding title insurance NYC, please don’t hesitate to contact Larry at Langdon Title, which you can do so either via email, telephone or the website.

Title insurance covers issues relating to a property’s title; it is not a substitute for homeowner’s insurance and will not cover general property-related problems. In this blog, we’ll be outlining the main issues that title insurance covers, along with the problems that it does not cover.

However, please remember that every title policy will differ in the type of coverage it offers; so when taking out title insurance, it’s important to read through the policy with a fine-tooth comb and ensure that it provides you with the specific coverage you require. 

Title insurance coverage

As mentioned above, the included coverage will vary from policy to policy, but generally speaking, title insurance will cover the following title-related issues:

• Disputes or defects created by a prior event that prevents the property from having a clean title – such as claims to ownership from an unknown or undisclosed heir or conflicting wills
• Liens – such as outstanding debt, taxes or lawsuits tied to the property
• Mistakes in public records and property surveys
• Title-related fraud or forgery
• Encroachments

Remember that you as the buyer will only be protected if you obtain owner’s title insurance – lender’s title insurance will only protect your mortgage lender. Find out more in our ‘What Is Owner’s Title Insurance?’ blog. 

What is not covered by title insurance?

Title insurance will only cover you for issues that relate specifically to the title of the property, and will therefore not cover you for more general property-related issues, such as property damages, general repairs or pest infestations, and it will not cover you for issues that have occurred as a result of your own doing. You may also find that your policy has some exclusions; for example, you may not be covered for title issues that are not disclosed in public records and you’re unlikely to be covered for any unresolved title defects that you already knew about before buying the property.  

Find the most effective title insurance coverage

Speaking to an expert is the best way to protect yourself and ensure that you have the most effective type of coverage possible. Every policy varies, so it’s important to fully understand what is and is not covered. If you’re looking to take out title insurance, please get in touch via email, telephone or the website at any time and I’ll support you in finding the most appropriate title insurance for your commercial or residential real estate needs.