Title Insurance

What is Title Insurance?

Title insurance is different from other types of insurance in that it is retrospective; it is designed to protect an insured owner from losses arising from defects occurring prior to the date of the policy. Title insurance covers the loss or damage from a defect in the title to land, which arose prior to the effective date of the policy. Thus,this policy looks backwards.

Is the title to the property in question as it is represented? A title search provides the basic information used by a buyer and/or lender to decide if the investment is sound. Since few titles are ever perfect, conveyancers often cure defects to titles. If the title is not as it is represented in the title insurance policy, then the insurer has the chance to correct the problem. The loss is the value of the policy amount, not consequential damages. Real Estate Attorneys Title Insurance

Title insurance is based upon that examination of the title and the curing of certain defects. The title insurance company judges past conveyances and then decides whether or not to accept a certain amount of risk. The standard title insurance policy is based upon closing practices that are designed to limit any risks.

The 1992 jacket by the American Land Title Association is now in effect for standard title insurance. The jacket contains the insuring provisions, exclusions from coverage, and conditions with stipulations. Remember the exclusions from coverage, especially:

#3. Defects, liens, encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company …
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy

What does an owner's Policy Insure?

Buying a home is likely the most important investment your client will ever make. The title insurance policy insures the named insured as to the matters shown on Schedule B, promising marketability and legal access.

The loan policy that your client purchased only protects the lender against loss due to unknown title defects. Owners are not covered by the loan policy.

Even the most thorough search cannot absolutely assure that no title defects are present. Title insurance is designed to complement a title search, not replace it. Consider these situations:

What if the issuer of the title certificate is no longer alive or in business?
What if the mistake occurred before the period of the title search?
What if the defect was not discoverable by the most reasonable examiner (negligence is the standard)?
The title insurance company pays to defend any lawsuit attacking the title as insured.
The title insurance company cleans up the problem or pays the insured’s loss.
The title insurance company is in the position to provide affirmative insurance, while the problem is being investigated, which may save the refinance or sale of the home.

The Loan policy covers the same matter plus the enforceability and priority of the mortgage and described assignment thereof. It provides the owner with no protection.

Residential Title and Escrow Services

Residential Title and Escrow Services currently employs licensed closing attorneys across the New England states, the Mid-Atlantic and Florida. Our attorneys service cities and towns, including Boston and Boston-area communities, Hartford, Milford, Worcester, Providence, Cape Cod and the Islands (Nantucket, Martha's Vineyard, ...), Manchester and Western Massachusetts. Our licensed closing agents service cities and town from the Mid-Atlantic to Florida. We are a full service real estate company, with conveyance attorneys serving all of your title, closing, escrow and other real estate attorney needs.