How to Obtain a Policy
How to Obtain a Title Insurance Policy
How do you obtain a title insurance policy? It’s simple. Available for a one-time premium payment at the time the property is purchased and/or financed, purchasers may obtain an owner’s policy of title insurance, and mortgage lenders a loan policy of title insurance, to protect their respective needs.
A title insurance policy premium is based on the purchase price/loan amount and is typically collected at closing with all other funds for the transaction. There is no annual premium to pay as there is for other lines of insurance such as automobile or homeowner’s insurance.
Most mortgage lenders require the borrower to purchase a loan policy of title insurance on behalf of the lender. It’s important to remember that this loan policy of title insurance only provides protection for the lender’s interest in the property. It does not provide any protection for the purchaser’s interest in the property. The purchaser must obtain their own policy. The additional cost of obtaining an owner’s policy in addition to a loan policy depends on the difference between the loan amount and purchase price. In most cases, it is a very small incremental additional charge.
Opting for an owner’s policy at closing time is always prudent. The incremental additional cost far outweighs the additional costs that can arise in the future, for example, if an owner’s policy of title insurance is not purchased and a defect becomes known after ownership of the property is acquired. Without an owner’s policy, the owner will be left to defend their title and settle the dispute without the benefit of a title insurance company. The result: the owner will likely incur significant legal fees. In a worst case scenario, the property can even be lost if there is a complete failure of title.
Agents of Conestoga Title Typically Offer Thorough Title Search and Examination
A title agent for Conestoga will conduct a thorough search and examination of the title to the property prior to closing, making a complete and diligent effort to discover any potential defects, liens or encumbrances.
A title insurance commitment will then be prepared showing all defects, liens and encumbrances discovered during the search and exam. This commitment will specify requirements that need to be met, including liens that need to be paid. It will also list specific exceptions that will not be covered by the policy, including easements and restrictions that are of public record.
Conestoga’s agent will work to clear all known liens and defects and conduct a closing. Instruments such as deeds and mortgages will be executed at closing to transfer the title, and funds will be collected to pay open liens, taxes, etc. The title insurance premium will also be collected at closing. Conestoga’s agent will ensure the instruments are duly recorded at the local courthouse, then issue the title insurance policies that were paid for at closing.